Recent work has demonstrated that p56(lck), a member of the Src family of protein tyrosine kinases (PTKs), is modified by palmitoylation of a cysteine residue(s) within the first 10 amino acids of the protein (in addition to amino-terminal myristoylation that is a common modification of the Src family of PTKs). This is now extended to three other members of this family by showing incorporation of [3H]palmitate into p59(fyn), p55(fgr), and p56(hck), but not into p60(src). The [3H]palmitate was released by treatment with neutral hydroxylamine, indicating a thioester linkage to the protein. Individual replacement of the two cysteine residues within the first 10 amino acids of p59(fyn) and p56(lck) with serine indicated that Cys3 was the major determinant of palmitoylation, as well as association of the PTK with glycosyl-phosphatidylinositol-anchored proteins. Introduction of Cys3 into p60(src) led to its palmitoylation. p59(fyn) but not p60(src) partitioned into Triton-insoluble complexes that contain caveolae, microinvaginations of the plasma membrane. Mapping of the requirement for partitioning into caveolae demonstrated that the amino-terminal sequence Met-Gly-Cys is both necessary and sufficient within the context of a Src family PTK to confer localization into caveolae. Palmitoylation of this motif in p59(fyn) also modestly increased its overall avidity for membranes. These results highlight the role of the amino-terminal motif Met-Gly-Cys in determining the structure and properties of members of the Src family of PTKs.