Covalent attachment of myristate and/or palmitate occurs on a wide variety of viral and cellular proteins. This review will highlight the latest advances in our understanding of the enzymology of N-myristoylation and palmitoylation as well as the functional consequences of fatty acylation of key signaling proteins. The role of myristate and palmitate in promoting membrane binding as well as specific membrane targeting will be reviewed, with emphasis on the Src family of tyrosine protein kinases and α subunits of heterotrimeric G proteins. The use of myristoyl switches and regulated depalmitoylation as mechanisms for achieving reversible membrane binding and regulated signaling will also be explored.