TRPML3 is an organellar Ca2+ permeable channel that plays an important role in membrane trafficking and autophagy. Although TRPML3 shows dynamic subcellular localization during endocytosis and autophagy, the underlying mechanism by which TRPML3 traffics between intracellular compartments is not known. Here we report that TRPML3 undergoes palmitoylation at C-terminal cysteine residues (Cys549-551), and that the palmitoylation is required for the dynamic intracellular trafficking of TRPML3. Cell surface expression of TRPML3 was decreased by inhibition of palmitoylation, whereas organellar targeting and channel activity appeared not to be affected. The impaired TRPML3 trafficking by palmitoylation-site mutations altered TRPML3 function in endocytosis, leading to increased endocytosis. Upon induction of autophagy, palmitoylation mutant did not exacerbate autophagy compared with WT-TRPML3. Importantly, inhibition of TRPML3 palmitoylation markedly reduced autophagic flux in induced autophagy. Taken together, these findings suggest that palmitoylation is essential for TRPML3 functions in endocytosis and autophagy by regulating its trafficking between subcellular compartments.