Type I interferons (IFNs) bind IFNAR receptors and activate Jak kinases and Stat transcription factors to stimulate the transcription of genes downstream from IFN-stimulated response elements. In this study, we analyze the role of protein palmitoylation, a reversible post-translational lipid modification, in the functional properties of IFNAR. We report that pharmacological inhibition of protein palmitoylation results in severe defects of IFN receptor endocytosis and signaling. We generated mutants of the IFNAR1 subunit of the type I IFN receptor, in which each or both of the two cysteines present in the cytoplasmic domain are replaced by alanines. We show that cysteine 463 of IFNAR1, the more proximal of the two cytoplasmic cysteines, is palmitoylated. A thorough microscopic and biochemical analysis of the palmitoylation-deficient IFNAR1 mutant revealed that IFNAR1 palmitoylation is not required for receptor endocytosis, intracellular distribution, or stability at the cell surface. However, the lack of IFNAR1 palmitoylation affects selectively the activation of Stat2, which results in a lack of efficient Stat1 activation and nuclear translocation and IFN-␣-activated gene transcription. Thus, receptor palmitoylation is a previously undescribed mechanism of regulating signaling activity by type I IFNs in the Jak/Stat pathway.Type I interferons (IFN 7 ␣/␤) are potent cellular mediators essential for several key cell functions, including immunomodulatory, antiviral, and antiproliferative activities. These pleiotropic effects occur through the transcriptional regulation of many IFN-stimulated genes (ISGs) (1). IFN signal transduction relies mainly on the activation of the Janus tyrosine kinase (Jak)/signal-transducing activators of transcription (Stat) pathways, although several other signaling cascades have also been associated with IFN-regulated transcription (2, 3). In general, the binding of type I IFNs to the cell surface receptor IFNAR1 and IFNAR2 subunits induces tyrosine phosphorylation in trans of the IFNAR-associated Jak kinases (Tyk2 with IFNAR1 and Jak1 with IFNAR2), which in turn leads to IFNAR tyrosine phosphorylation. Several members of the Stat family can be activated by type I IFNs, and Stat1 and Stat2 are the main downstream effectors of the type I IFN transcriptional response. Upon IFN-␣ stimulation, cytosolic Stat2 is recruited to the activated IFNAR complex where it becomes tyrosine-phosphorylated by the receptor-associated Jak kinases. Stat2 activation is a key event in IFN-␣ signaling because it is required for the indirect recruitment, through binding to Stat2, of Stat1 to IFNAR1 and its activation. There is some debate as to whether cytosolic Stat2 is preferentially recruited to IFNAR1 or to IFNAR2 (4 -9). Whereas the SH2 domain of Stat2 binds to a region surrounding the phosphorylated tyrosine 466 of IFNAR1, Stat2 can bind to IFNAR2 whether it is tyrosine-phosphorylated or not. This series of sequential tyrosine phosphorylations precedes the translocation of the IFN-stimulated gene factor 3...