Palmitoylation is a well-conserved posttranslational modification among members of the G protein-coupled receptor super-family. The present study examined the role of palmitoylation in endocytosis and postendocytic trafficking of the human LH receptor (LHR). Palmitoylation of the LHR was determined by incorporation of [3H]palmitic acid into wild-type (WT) or mutant receptor in which the potential palmitoylation sites, C643 and C644, were mutated to glycine residues. The WT receptor showed incorporation of [ 3H]palmitic acid into the mature 90-kDa form of the receptor whereas mutation of the two Cys residues abrogated this incorporation, indicating that Cys 643 and C644 are the sites of palmitoylation. The role of palmitoylation on endocytosis and postendocytic processing was examined by testing the ability of the WT and mutant receptor to undergo internalization, recycling, and lysosomal degradation. Compared with the WT receptor, the mutant receptor showed increased internalization and decreased recycling, suggesting that retention of palmitic acid residues at Cys 643 and 644 promotes LHR recycling. The role of palmitoylation on receptor recycling was substantiated by demonstrating that a different mutant, D578H LHR, which is deficient in palmitoylation, also recycled less efficiently. Furthermore, the data show that palmitoylation, not the rate of internalization, determines the efficiency of recycling. The present study shows that palmitoylation of cysteine residues 643 and 644 of the human LHR is a determinant of recycling.