The linker molecule LAT is a critical substrate of the tyrosine kinases activated upon TCR engagement. Phosphorylated LAT binds Grb2, PLC-γ1, and other signaling molecules. We demonstrate that human LAT is palmitoylated and that palmitoylated LAT predominantly localizes into glycolipid-enriched microdomains (GEMs). Although the LAT transmembrane domain is sufficient for membrane localization, palmitoylation at C26 and C29 is essential for efficient partitioning into GEMs. LAT palmitoylation is necessary for its tyrosine phosphorylation. After T cell activation, most tyrosine-phosphorylated LAT molecules and a fraction of PLC-γ1 and other signaling molecules are present in GEMs. LAT is central to T cell activation and is a novel linker molecule shown to require targeting to membrane microdomains for signaling.