Previously, we identified cytoskeleton-associated protein 4 (CKAP4) as a major substrate of the palmitoyl acyltransferase, DHHC2, using a novel proteomic method called palmitoyl-cysteine identification, capture and analysis (PICA). CKAP4 is a reversibly palmitoylated and phosphorylated protein that links the ER to the cytoskeleton. It is also a high-affinity receptor for antiproliferative factor (APF), a small sialoglycopeptide secreted from bladder epithelial cells of patients with interstitial cystitis (IC). The role of DHHC2-mediated palmitoylation of CKAP4 in the antiproliferative response of HeLa and normal bladder epithelial cells to APF was investigated. Our data show that siRNA-mediated knockdown of DHHC2 and consequent suppression of CKAP4 palmitoylation inhibited the ability of APF to regulate cellular proliferation and blocked APF-induced changes in the expression of E-cadherin, vimentin, and ZO-1 (genes known to play a role in cellular proliferation and tumorigenesis). Immunocytochemistry revealed that CKAP4 palmitoylation by DHHC2 is required for its trafficking from the ER to the plasma membrane and for its nuclear localization. These data suggest an important role for DHHC2-mediated palmitoylation of CKAP4 in IC and in opposing cancer-related cellular behaviors and support the idea that DHHC2 is a tumor suppressor.