Calpain-5 (CAPN5) is a member of the calpain family of calcium-activated neutral thiol proteases. CAPN5 is partly membrane associated, despite its lack of a transmembrane domain. Unlike classical calpains, CAPN5 contains a C-terminal C2 domain. C2 domains often have affinity to lipids, mediating membrane association. We recently reported that the C2 domain of CAPN5 was essential for its membrane association and the activation of its autolytic activity. However, despite the removal of the C2 domain by autolysis, the N-terminal fragment of CAPN5 remained membrane associated. S-acylation, also referred to as S-palmitoylation, is a reversible post-translational lipid modification of cysteine residues that promotes membrane association of soluble proteins. In the present study several S-acylated cysteine residues were identified in CAPN5 with the acyl-PEG exchange method. Data reported here demonstrate that CAPN5 is S-acylated on up to three cysteine residues including Cys-4 and Cys-512, and likely Cys-507. The D589N mutation in a potential calcium binding loop within the C2 domain interfered with the S-acylation of CAPN5, likely preventing initial membrane association. Mutating specific cysteine residues of CAPN5 interfered with both its membrane association and the activation of CAPN5 autolysis. Taken together, our results suggest that the S-acylation of CAPN5 is critical for its membrane localization which appears to favor its enzymatic activity.