Palmitoylation, a key regulatory mechanism controlling protein targeting, is catalyzed by DHHC-family palmitoyl acyltransferases (PATs). Impaired PAT activity is linked to neurodevelopmental and neuropsychiatric disorders, suggesting critical roles for palmitoylation in neuronal function. However, few substrates for specific PATs are known, and functional consequences of palmitoylation events are frequently uncharacterized. Here, we identify the closely related PATs DHHC5 and DHHC8 as specific regulators of the PDZ domain protein GRIP1b. Binding, palmitoylation, and dendritic targeting of GRIP1b require a PDZ ligand unique to DHHC5/8. Palmitoylated GRIP1b is targeted to trafficking endosomes and may link endosomes to kinesin motors. Consistent with this trafficking role, GRIP1b's palmitoylation turnover rate approaches the highest of all reported proteins, and palmitoylation increases GRIP1b's ability to accelerate AMPA-R recycling. To our knowledge, these findings identify the first neuronal DHHC5/8 substrate, define novel mechanisms controlling palmitoylation specificity, and suggest further links between dysregulated palmitoylation and neuropathological conditions.