Protein acylation by long-chain fatty acids has been suggested as a necessary step in membrane trafficking. Because several insulin effects are dependent upon membrane trafficking, the cellular effects of the protein acylation inhibitor cerulenin were examined. Cerulenin blocked palmitoylation of selected rat adipocyte proteins including CD36, the dominant marker for palmitoylation in adipocytes. To measure cerulenin's effects on insulin internalization, rat adipocytes were incubated with 125I-insulin at 37°C in the presence or absence of cerulenin. Surface-bound and intracellular insulin were discriminated by the sensivity of the former to rapid dissociation by a pH 3 buffer at 4°C. Insulin internalization was inhibited 85% by 0.3 mM cerulenin. Inhibition required preincubation with the agent, was irreversible, was not dependent upon protein synthesis, and was not the result of ATP depletion. Cerulenin was also found to inhibit insulin-stimulated glucose uptake and acetyl-CoA carboxylase activity. Cerulenin had no effect on basal glucose uptake and utilization or on the uptake and retention of fatty acids. In summary, protein acylation may be an important step in insulin-regulated cellular functions dependent upon membrane trafficking, such as insulin internalization. © 1995.