A fatty acyltransferase activity which catalyzes the transfer of palmitic acid from palmitoyl coenzyme A to gastric mucus glycoprotein has been demonstrated in the rat gastric mucosa. Subcellular fractionation studies revealed that the enzyme activity was present in a Golgi-rich membrane fraction. Optimum enzymatic activity for acylation of mucus glycoprotein was obtained with 0.5% Triton X-100, 25 mM NaF, and 2 mM dithiothreitol at a pH of 7.4. The enzymatic activity increased proportionally, over a given range, with increased concentrations of both substrates and of enzyme. The apparent Km of the enzymes for the undegraded mucus glycoprotein was 4.5 X 10(-7) M and for palmitoyl-CoA, 3.8 X 10(-5) M. The 14C-labeled product of the reaction cochromatographed on Bio-Gel A-50 column and migrated on sodium dodecyl sulfate-polyacrylamide gel electrophoresis with gastric mucus glycoprotein. Treatment of this 14C-labeled glycoprotein with mild alkali released hexane-extractable product which was identified as [14C]palmitate. The enzyme was also capable of fatty acylation of the deglycosylated glycoprotein, but did not catalyze the transfer of palmitic acid to the proteolytically degraded mucus glycoprotein. This indicates that the acceptor site for fatty acyltransferase is situated in the protease-susceptible nonglycosylated region of the mucus glycoprotein polymer.