The protein acyl transferase ZDHHC5 was recently proposed to regulate trafficking in the endocytic pathway. Therefore, we explored the function of this enzyme in controlling the action of bacterial toxins. We found that ZDHHC5 activity is required for two very different toxins: the anthrax lethal toxin and the pore-forming toxin aerolysin. Both of these toxins have precursor forms, the protoxins, which can use the proprotein convertases Furin and PC7 for activation. We show that ZDHHC5 indeed affects the processing of the protoxins to their active forms. We found that Furin and PC7 can both be S-palmitoylated and are substrates of ZDHHC5. The impact of ZDHHC5 on Furin/PC7-mediated anthrax toxin cleavage is dual, having an indirect and a direct component. First, ZDHHC5 affects the homeostasis and trafficking of a subset of cellular proteins, including Furin and PC7, presumably by affecting the endocytic/recycling pathway. Second, while not inhibiting the protease activity per se, ZDHHC5-mediated Furin/PC7 palmitoylation is required for the cleavage of the anthrax toxin. Finally, we show that palmitoylation of Furin and PC7 promotes their association with plasma membrane microdomains. Both the receptor-bound toxin and the convertases are of very low abundance at the cell surface. Their encounter is unlikely on reasonable time scales. This work indicates that palmitoylation drives their encounter in specific domains, allowing processing and thereby intoxication of the cell.