Reversible S-palmitoylation of cysteine residues critically controls transient membrane tethering of peripheral membrane proteins. Little is known about how the palmitoylation machinery governs their defined localization and function. We monitored the spatially resolved reaction dynamics and substrate specificity of the core mammalian palmitoylation machinery using semisynthetic substrates. Palmitoylation is detectable only on the Golgi, whereas depalmitoylation occurs everywhere in the cell. The reactions are not stereoselective and lack any primary consensus sequence, demonstrating that substrate specificity is not essential for de-/repalmitoylation. Both palmitate attachment and removal require seconds to accomplish. This reaction topography and rapid kinetics allows the continuous redirection of mislocalized proteins via the post-Golgi sorting apparatus. Unidirectional secretion ensures the maintenance of a proper steady-state protein distribution between the Golgi and the plasma membrane, which are continuous with endosomes. This generic spatially organizing system differs from conventional receptor-mediated targeting mechanisms and efficiently counteracts entropy-driven redistribution of palmitoylated peripheral membrane proteins over all membranes.