RGS9-2, a member of the R7 regulators of G protein signaling (RGS) protein family of neuronal RGS, is a critical regulator of G protein signaling. In striatal neurons, RGS9-2 is tightly associated with a novel palmitoylated protein, R7BP (R7 family binding protein). Here we report that R7BP acts to target the localization of RGS9-2 to the plasma membrane. Examination of the subcellular distribution in native striatal neurons revealed that both R7BP and RGS9-2 are almost entirely associated with the neuronal membranes. In addition to the plasma membrane, a large portion of RGS9-2 was found in the neuronal specializations, the postsynaptic densities, where it forms complexes with R7BP and its constitutive partner Gbeta5. Using site-directed mutagenesis we found that the molecular determinants that specify the subcellular targeting of RGS9-2.Gbeta5.R7BP complex are contained within the 21 C-terminal amino acids of R7BP. This function of the C terminus was found to require the synergistic contributions of its two distinct elements, a polybasic motif and palmitoylated cysteines, which when combined are sufficient for directing the intracellular localization of the constituent protein. In differentiated neurons, the C-terminal targeting motif of R7BP was found to be essential for mediating its postsynaptic localization. In addition to the plasma membrane targeting elements, we identified two functional nuclear localization sequences that can mediate the import of R7BP into the nucleus upon depalmitoylation. These findings provide a mechanism for the subcellular targeting of RGS9-2 in neurons.