SCG10 is a neuronal growth-associated protein that is concentrated in the growth cones of developing neurons. SCG10 shows a high degree of sequence homology to the ubiquitous phosphoprotein stathmin, which has been recently identified as a factor that destabilizes microtubules by increasing their catastrophe rate. Whereas stathmin is a soluble cytosolic protein, SCG10 is membrane-associated, indicating that the protein acts in a distinct subcellular compartment. Identifying the precise intracellular distribution of SCG10 as well as the mechanisms responsible for its specific targeting will contribute to elucidating its function. The main structural feature distinguishing the two proteins is that SCG10 contains an NH2-terminal extension of 34 amino acids. In this study, we have examined the intracellular distribution of SCG10 in PC12 cells and in transfected COS-7 cells and the role of the NH2-terminal domain in membrane-binding and intracellular targeting. SCG10 was found to be localized to the Golgi complex region. We show that the NH2-terminal region (residues 1-34) was necessary for membrane targeting and Golgi localization. Fusion proteins consisting of the NH2-terminal 34 amino acids of SCG10 and the related protein stathmin or the unrelated protein, beta-galactosidase, accumulated in the Golgi, demonstrating that this sequence was sufficient for Golgi localization. Biosynthetic labeling of transfected COS-7 cells with [3H]palmitic acid revealed that two cysteine residues contained within the NH2-terminal domain were sites of palmitoylation.