The Ig-ITIM superfamily member, PECAM-1 acts as a negative regulator of ITAM-signalling pathways in platelets involving GPVI/FcR gamma chain and Fc?RIIa. This negative feedback loop involves regulation of collagen and GPVI-dependent aggregation events, platelet-thrombus-growth on immobilised collagen under flow and Fc?RIIa-mediated platelet responses. In this study, we show that PECAM-1 is selectively palmitoylated involving a thioester linkage with an unpaired cysteine residue at amino acid position 595 in its cytoplasmic domain. As palmitoylation is known to target proteins to membrane microdomains, we investigated the microdomain localisation for PECAM-1 in platelets and nucleated cells. In unstimulated platelets, approximately 20% of PECAM-1 is localised to Triton-insoluble microdomain fractions and it does not increase with platelet activation by collagen, collagen-related peptide, thrombin- or human-aggregated IgG. PECAM-1 is in close physical proximity with GPVI in platelet microdomains. Removal of platelet cytoskeleton prior to sucrose-density-gradient separation showed that PECAM-1 was associated with both the Triton-soluble and membrane skeleton in microdomain-associated fractions. Disruption of microdomains by membrane-cholesterol depletion resulted in loss of PECAM-1 localisation to membrane microdomains. Mutational analysis of juxtamembrane cysteine residue to alanine (C595A) of human PECAM-1 resulted in loss of palmitoylation and a sixfold decrease in association with membrane microdomains. Functionally, the palmitoylated cysteine 595 residue is required, in part, for efficient PECAM-1-mediated cytoprotection. These results show that cysteine 595 is required for constitutive association of PECAM-1 with membrane microdomains and PECAM-1-mediated cytoprotection, where it may act as a crucial regulator of signaling and apoptosis events.