Palmitoylation (S-acylation) is the reversible conjugation of a fatty acid (usually C16 palmitate) to intracellular cysteine residues of proteins via a thioester linkage. Palmitoylation anchors intracellular regions of proteins to membranes because the palmitoylated cysteine is recruited to the lipid bilayer. NCX1 is palmitoylated at a single cysteine in its large regulatory intracellular loop. The presence of an amphipathic α-helix immediately adjacent to the NCX1 palmitoylation site is required for NCX1 palmitoylation. The NCX1 palmitoylation site is conserved through most metazoan phlya. Although palmitoylation does not regulate the normal forward or reverse ion transport modes of NCX1, NCX1 palmitoylation is required for its inactivation: sodium-dependent inactivation and inactivation by PIP2 depletion are significantly impaired for unpalmitoylatable NCX1. Here we review the role of palmitoylation in regulating NCX1 activity, and highlight future questions that must be addressed to fully understand the importance of this regulatory mechanism for sodium and calcium transport in cardiac muscle.