G protein alpha subunits and beta gamma dimers are covalently modified by lipids. The emerging picture is one in which attached lipids provide more than just a nonspecific "glue" for sticking G proteins to membranes. We are only beginning to understand how different lipid modifications of different G protein subunits affect specific protein-protein interactions and localization to specific cellular sites. In addition, regulation of these modifications, particularly palmitoylation, can provide new ways to regulate signals transmitted by G proteins.