ABSTRACT Retromer is a multimeric protein complex that mediates endosome-to-trans-Golgi network (TGN) and endosome-to-plasma membrane trafficking of integral membrane proteins. Dysfunction of this complex has been linked to Alzheimer's disease and Parkinson's disease. The recruitment of retromer to endosomes is regulated by Rab7 (also known as RAB7A) to coordinate endosome-to-TGN trafficking of cargo receptor complexes. Rab7 is also required for the degradation of internalized integral membrane proteins, such as the epidermal growth factor receptor (EGFR). We found that Rab7 is palmitoylated and that this modification is not required for membrane anchoring. Palmitoylated Rab7 colocalizes efficiently with and has a higher propensity to interact with retromer than nonpalmitoylatable Rab7. Rescue of Rab7 knockout cells by expressing wild-type Rab7 restores efficient endosome-to-TGN trafficking, while rescue with nonpalmitoylatable Rab7 does not. Interestingly, Rab7 palmitoylation does not appear to be required for the degradation of EGFR or for its interaction with its effector, Rab-interacting lysosomal protein (RILP). Overall, our results indicate that Rab7 palmitoylation is required for the spatiotemporal recruitment of retromer and efficient endosome-to-TGN trafficking of the lysosomal sorting receptors.