Recent data suggest that a functional cooperation between surfactant proteins SP-B and SP-C may be required to sustain a proper compression-expansion dynamics in the presence of physiological proportions of cholesterol. SP-C is a dually palmitoylated polypeptide of 4.2 kDa, but the role of acylation in SP-C activity is not completely understood. In this work we have compared the behavior of native palmitoylated SP-C and recombinant nonpalmitoylated versions of SP-C produced in bacteria to get a detailed insight into the importance of the palmitic chains to optimize interfacial performance of cholesterol-containing surfactant films. We found that palmitoylation of SP-C is not essential for the protein to promote rapid interfacial adsorption of phospholipids to equilibrium surface tensions (∼22 mN/m), in the presence or absence of cholesterol. However, palmitoylation of SP-C is critical for cholesterol-containing films to reach surface tensions ≤1 mN/m at the highest compression rates assessed in a captive bubble surfactometer, in the presence of SP-B. Interestingly, the ability of SP-C to facilitate reinsertion of phospholipids during expansion was not impaired to the same extent in the absence of palmitoylation, suggesting the existence of palmitoylation-dependent and -independent functions of the protein. We conclude that palmitoylation is key for the functional cooperation of SP-C with SP-B that enables cholesterol-containing surfactant films to reach very low tensions under compression, which could be particularly important in the design of clinical surfactants destined to replacement therapies in pathologies such as acute respiratory distress syndrome.