We have identified a protein-acyltransferase activity in membranes from mouse fibroblasts which transfers palmitate from palmitoyl-CoA to p21N-ras. Specificity of acylation has been confirmed by linkage analysis using hydroxylamine and by peptide mapping of in vivo and in vitro acylated p21N-ras. The acylation was temperature- and time-dependent, and prevented by prior boiling of membranes, consistent with an enzymatic process. The activity was detected in membranes, but not cytosol, and co-fractionated on Percoll gradients with Golgi markers. Cytosolic p21N-ras from mouse fibroblasts, which is C-terminally modified at its CAAX sequence, was a better substrate for the enzyme than recombinant bacterially expressed, unmodified p21N-ras. The activity could be solubilised in non-ionic detergents, making it amenable to purification.