Regulator of G protein signaling (RGS) proteins are GTPase-activating proteins that modulate neurotransmitter and G protein signaling. RGS7 and its binding partners Galpha and Gbeta5 are enriched in brain, but biochemical mechanisms governing RGS7/Galpha/Gbeta5 interactions and membrane association are poorly defined. We report that RGS7 exists as one cytosolic and three biochemically distinct membrane-bound fractions (salt-extractable, detergent-extractable, and detergent-insensitive) in brain. To define factors that determine RGS7 membrane attachment, we examined the biochemical properties of recombinant RGS7 and Gbeta5 synthesized in Spodoptera frugiperda insect cells. We have found that membrane-bound but not cytosolic RGS7 is covalently modified by the fatty acid palmitate. Gbeta5 is not palmitoylated. Both unmodified (cytosolic) and palmitoylated (membrane-derived) forms of RGS7, when complexed with Gbeta5, are equally effective stimulators of Galpha(o) GTPase activity, suggesting that palmitoylation does not prevent RGS7/Galpha(o) interactions. The isolated core RGS domain of RGS7 selectively binds activated Galpha(i/o) in brain extracts and is an effective stimulator of both Galpha(o) and Galpha(i1) GTPase activities in vitro. In contrast, the RGS7/Gbeta5 complex selectively interacts with Galpha(o) only, suggesting that features outside the RGS domain and/or Gbeta5 association dictate RGS7-Galpha interactions. These findings define previously unrecognized biochemical properties of RGS7, including the first demonstration that RGS7 is palmitoylated.