The dually lipidated SNARE Ykt6 is found on intracellular membranes and in the cytosol. In this study, we show that Ykt6 localizes to the Golgi as well as endosomal and vacuolar membranes in vivo. The ability of Ykt6 to cycle between the cytosol and the membranes depends on the intramolecular interaction of the N-terminal longin and C-terminal SNARE domains and not on either domain alone. A mutant deficient in this interaction accumulates on membranes and – in contrast to the wild-type protein – does not get released from vacuoles. Our data also indicate that Ykt6 is a substrate of the DHHC (Asp-His-His-Cys) acyltransferase network. Overexpression of the vacuolar acyltransferase Pfa3 drives the F42S mutant not only to the vacuole but also into the vacuolar lumen. Thus, depalmitoylation and release of Ykt6 are needed for its recycling and to circumvent its entry into the endosomal multivesicular body pathway.