Reversible attachment and removal of palmitate or other long-chain fatty acids on proteins has been hypothesized, like phosphorylation, to control diverse biological processes. Indeed, palmitate turnover regulates Ras trafficking and signaling. Beyond this example, however, the functions of palmitate turnover on specific proteins remain poorly understood. Here, we show that a mechanism regulating G protein-coupled receptor signaling in neuronal cells requires palmitate turnover. We used hexadecyl fluorophosphonate or palmostatin B to inhibit enzymes in the serine hydrolase family that depalmitoylate proteins, and we studied R7 regulator of G protein signaling (RGS)-binding protein (R7BP), a palmitoylated allosteric modulator of R7 RGS proteins that accelerate deactivation of Gi/o class G proteins. Depalmitoylation inhibition caused R7BP to redistribute from the plasma membrane to endomembrane compartments, dissociated R7BP-bound R7 RGS complexes from Gi/o-gated G protein-regulated inwardly rectifying K+ (GIRK) channels and delayed GIRK channel closure. In contrast, targeting R7BP to the plasma membrane with a polybasic domain and an irreversibly attached lipid instead of palmitate rendered GIRK channel closure insensitive to depalmitoylation inhibitors. Palmitate turnover therefore is required for localizing R7BP to the plasma membrane and facilitating Gi/o deactivation by R7 RGS proteins on GIRK channels. Our findings broaden the scope of biological processes regulated by palmitate turnover on specific target proteins. Inhibiting R7BP depalmitoylation may provide a means of enhancing GIRK activity in neurological disorders.