To examine endothelial nitric-oxide synthase (eNOS) trafficking in living endothelial cells, the eNOS-deficient endothelial cell line ECV304 was stably transfected with an eNOS-green fluorescent protein (GFP) fusion construct and characterized by functional, biochemical, and microscopic analysis. eNOS-GFP was colocalized with Golgi and plasma membrane markers and produced NO in response to agonist challenge. Localization in the plasma membrane was dependent on the palmitoylation state, since the palmitoylation mutant of eNOS (C15S/C26S eNOS-GFP) was excluded from the plasma membrane and was concentrated in a diffuse perinuclear pattern. Fluorescence recovery after photobleaching (FRAP) revealed eNOS-GFP in the perinuclear region moving 3 times faster than the plasmalemmal pool, suggesting that protein-lipid or protein-protein interactions are different in these two cellular domains. FRAP of the palmitoylation mutant was two times faster than that of wild-type eNOS-GFP, indicating that palmitoylation was influencing the rate of trafficking. Interestingly, FRAP of C15S/C26S eNOS-GFP but not wild-type eNOS-GFP fit a model of protein diffusion in a lipid bilayer. These data suggest that the regulation of eNOS trafficking within the plasma membrane and Golgi are probably different mechanisms and not due to simple diffusion of the protein in a lipid bilayer.