Palmitoylcarnitine was observed previously to promote differentiation of neuroblastoma NB-2a cells, and to affect protein kinase C (PKC). Palmitoylcarnitine was also observed to increase palmitoylation of several proteins, including a PKC substrate, whose expression augments during differentiation of neural cells-a growth associated protein GAP-43, known to bind phosphatidylinositol 4,5-bisphosphate [PI(4,5)P-2]. Since palmitoylated proteins are preferentially localized in sphingolipid- and cholesterol-rich microdomains of plasma membrane, the present study has been focused on a possible effect of palmitoylcarnitine on GAP-43 localization in these microdomains. Palmitoylcarnitine treatment resulted in GAP-43 appearance in floating fractions (rafts) in sucrose gradient and increased co-localization with cholesterol and with PI(4,5)P-2, although co-localization of both lipids decreased. GAP-43 disappeared from raft fraction upon treatment with 2-bromopalmitate (an inhibitor of palmitoylating enzymes) and after treatment with etomoxir (carnitine palmitoyltransferase I inhibitor). Raft localization of GAP-43 was completely abolished by treatment with methyl-beta-cyclodextrin, a cholesterol binding agent, while there was no change upon sequestration of PI(4,5)P-2 with neomycin. GAP-43 co-precipitated with a monomeric form of G alpha(o), a phenomenon diminished after palmitoylcarnitine treatment and paralleled by a decrease of G alpha(o) in the raft fraction. These observations point to palmitoylation of GAP-43 as a mechanism leading to an increased localization of this protein in microdomains of plasma membrane rich in cholesterol, in majority different, however, from microdomains in which PI(4,5)P-2 is present. This localization correlates with decreased interaction with G alpha(o) and suppression of its activity-an important step regulating neural cell differentiation.