The protein kinase Akt/PKB participates in a great variety of processes, including translation, cell proliferation and survival, as well as malignant transformation and viral infection. In the last few years, novel Akt posttranslational modifications have been found. However, how these modification patterns affect Akt subcellular localization, target specificity and, in general, function is not thoroughly understood. Here, we postulate and experimentally demonstrate by acyl-biotin exchange (ABE) assay and 3H-palmitate metabolic labeling that Akt is S-palmitoylated, a modification related to protein sorting throughout subcellular membranes. Mutating cysteine 344 into serine blocked Akt S-palmitoylation and diminished its phosphorylation at two key sites, T308 and T450. Particularly, we show that palmitoylation-deficient Akt increases its recruitment to cytoplasmic structures that colocalize with lysosomes, a process stimulated during autophagy. Finally, we found that cysteine 344 in Akt1 is important for proper its function, since Akt1-C344S was unable to support adipocyte cell differentiation in vitro. These results add an unexpected new layer to the already complex Akt molecular code, improving our understanding of cell decision-making mechanisms such as cell survival, differentiation and death.