Neuromodulin (GAP-43) is a neurospecific calmodulin binding protein that is targeted to neuronal growth cones via fast axonal transport by an undefined mechanism. The protein is associated with membranes by palmitoylation of cys-3 and cys-4. The objective of this study was to examine the intracellular localization of neuromodulin and neuromodulin mutants modified in the membrane targeting domain of the protein in neurons and non-neuronal cells. The N-terminal palmitoylation domain of neuromodulin was found to be sufficient for membrane and Golgi targeting as well as neurite transport. A fusion protein consisting of the N-terminal 20 amino acids of neuromodulin and beta-galactosidase accumulated in neurite endings demonstrating that this sequence is sufficient for targeting to growth cone membranes. Mutations in the palmitoylation domain of neuromodulin that abolished its acylation and membrane association diminished its Golgi localization. Mutations that prevented Golgi accumulation of neuromodulin-beta-galactosidase fusion proteins also interfered with neurite transport of the fusion proteins. These data demonstrate a correlation between membrane targeting, Golgi localization, and neurite transport of neuromodulin.