Palmitoylated proteins have been implicated in several disease states including Huntington’s, cardiovascular, T-cell mediated immune diseases, and cancer. To proceed with drug discovery efforts in this area, it is necessary to: identify the target enzymes, establish efficient assays for palmitoylation, and conduct high-throughput screening to identify inhibitors. The primary objectives of this review are to examine the types of assays used to study protein palmitoylation and to discuss the known inhibitors of palmitoylation. Six main palmitoylation assays are currently in use. Four assays, radiolabeled palmitate incorporation, fatty acyl exchange chemistry, MALDI-TOF MS and azido-fatty acid labeling are useful in the identification of palmitoylated proteins and palmitoyl acyltransferase (PAT) enzymes. Two other methods, the in vitro palmitoylation (IVP) assay and a cell-based peptide palmitoylation assay, are useful in the identification of PAT enzymes and are more amenable to screening for inhibitors of palmitoylation. To date, two general types of palmitoylation inhibitors have been identified. Lipid-based palmitoylation inhibitors broadly inhibit the palmitoylation of proteins; however, the mechanism of action of these compounds is unknown, and each also has effects on fatty acid biosynthesis. Conversely, several non-lipid palmitoylation inhibitors have been shown to selectively inhibit the palmitoylation of different PAT recognition motifs. The selective nature of these compounds suggests that they may act as protein substrate competitors, and may produce fewer non-specific effects. Therefore, these molecules may serve as lead compounds for the further development of selective inhibitors of palmitoylation, which may lead to new therapeutics for cancer and other diseases.