The G protein-coupled receptor kinase GRK6 undergoes posttranslational modification by palmitoylation. Palmitoylated GRK6 is associated with the membrane, while nonpalmitoylated GRK6 remains cytosolic. We have separated palmitoylated from nonpalmitoylated GRK6 to assess their relative kinase activity. Palmitoylated GRK6 is 10-fold more active at phosphorylating beta2-adrenergic receptor than nonpalmitoylated wild-type GRK6 or a nonpalmitoylatable mutant GRK6. A nonpalmitoylatable mutant GRK6 which has been further mutated to undergo posttranslational geranylgeranylation is also more active, recovering most of the activity of the palmitoylated enzyme. This activity increase by lipid modification is expected, as the lipid helps GRK6 localize to cellular membranes where its receptor substrates are found. However, when assayed using a soluble protein (casein) as a substrate, both palmitoylated and prenylated GRK6 display significantly higher activity than nonpalmitoylated wild-type or nonpalmitoylatable mutant GRK6 kinases. This increased activity is not altered by addition of exogenous palmitate or phosphatidycholine vesicles, arguing that it is not due to direct activation of GRK6 by binding palmitate, nor to nonspecific association of the GRK6 with casein. Further, chemical depalmitoylation reduces the casein phosphorylation activity of the palmitoylated, but not prenylated, GRK6 kinase. Thus, palmitoylation of GRK6 appears to play a dual role in increasing the activity of GRK6: it increases the hydrophobicity and membrane association of the GRK6 protein, which helps bring the GRK6 to its membrane-bound substrates, and it increases the kinase catalytic activity of GRK6.