As the first step in an investigation of roles played by fatty acylation of G protein alpha chains in membrane targeting and signal transmission, we inserted monoclonal antibody epitopes, hemagglutinin (HA) or Glu-Glu (EE), at two internal sites in three alpha subunits, At site I, only HA-tagged alpha(q) and alpha(z) functioned normally, alpha(s), alpha(q), and alpha(z) subunits tagged at site II with the EE epitope showed normal expression, membrane localization, and signaling activity, Using epitope tagged alpha(z), we investigated effects of mutations in sites for fatty acylation, Mutational substitution of Ala for Gly(2) (G2A) prevented incorporation of myristate and decreased but did not abolish incorporation of palmitate. Substitution of Ala for Cys(3) (C3A) prevented incorporation of palmitate but had no effect on incorporation of myristate, Substitution of Ala for both Gly(2) and Cys(3) (G2AC3A) prevented incorporation of both myristate and palmitate. All three mutations substantially disrupted association of a, with the particulate fraction. G(z)-mediated inhibition of adenylyl cyclase, triggered by activation of the D2-dopamine receptor, was, respectively, abolished (G2AC3A), impaired (G2A), and enhanced (C3A). Constitutive inhi bition of adenylyl cyclase by a, was unchanged (G2AC3A), strongly diminished (G2A), or strongly enhanced (C3A), A nonacylated, mutationally activated alpha(z) mutant inhibited adenylyl cyclase, although less potently than normally acylated, mutationally activated alpha(z). From these findings we conclude: (a) fatty acylations of alpha(z) increase its association with membranes; (b) myristoylation is not required for palmitoylation of alpha(z) or for its productive interactions with adenylyl cyclase; (c) palmitoylation is not required for, but may instead inhibit, signaling by alpha(z).