The SARS-coronavirus (SARS-CoV) is the etiological agent of the severe acute respiratory syndrome (SARS). The SARS-CoV spike (S) glycoprotein mediates membrane fusion events during virus entry and virus-induced cell-to-cell fusion. The cytoplasmic portion of the S glycoprotein contains four cysteine-rich amino acid clusters. Individual cysteine clusters were altered via cysteine-to-alanine amino acid replacement and the modified S glycoproteins were tested for their transport to cell-surfaces and ability to cause cell fusion in transient transfection assays. Mutagenesis of the cysteine cluster I, located immediately proximal to the predicted transmembrane, domain did not appreciably reduce cell-surface expression, although S-mediated cell fusion was reduced by more than 50% in comparison to the wild-type S. Similarly, mutagenesis of the cysteine cluster II located adjacent to cluster I reduced S-mediated cell fusion by more than 60% compared to the wild-type S, while cell-surface expression was reduced by less than 20%. Mutagenesis of cysteine clusters III and IV did not appreciably affect S cell-surface expression or S-mediated cell fusion. The wild-type S was palmitoylated as evidenced by the efficient incorporation of (3)H-palmitic acid in wild-type S molecules. S glycoprotein palmitoylation was significantly reduced for mutant glycoproteins having cluster I and II cysteine changes, but was largely unaffected for cysteine cluster III and IV mutants. These results show that the S cytoplasmic domain is palmitoylated and that palmitoylation of the membrane proximal cysteine clusters I and II may be important for S-mediated cell fusion.