Abstract Introduction Most breast cancer-related deaths result from metastasis, a process involving dynamic regulation of tumour cell adhesion and migration. The adhesion protein CD44, a key regulator of cell migration, is enriched in cholesterol-enriched membrane microdomains termed lipid rafts. We recently reported that raft affiliation of CD44 negatively regulates interactions with its migratory binding partner ezrin. Since raft affiliation is regulated by post-translational modifications including palmitoylation, we sought to establish the contribution of CD44 palmitoylation and lipid raft affiliation to cell migration. Methods Recovery of CD44 and its binding partners from raft versus non-raft membrane microdomains was profiled in non-migrating and migrating breast cancer cell lines. Site-directed mutagenesis was used to introduce single or double point mutations into both CD44 palmitoylation sites (Cys286 and Cys295), whereupon the implications for lipid raft recovery, phenotype, ezrin co-precipitation and migratory behaviour was assessed. Finally CD44 palmitoylation status and lipid raft affiliation was assessed in primary cultures from a small panel of breast cancer patients. Results CD44 raft affiliation was increased during migration of non-invasive breast cell lines, but decreased during migration of highly-invasive breast cells. The latter was paralleled by increased CD44 recovery in non-raft fractions, and exclusive non-raft recovery of its binding partners. Point mutation of CD44 palmitoylation sites reduced CD44 raft affiliation in invasive MDA-MB-231 cells, increased CD44-ezrin co-precipitation and accordingly enhanced cell migration. Expression of palmitoylation-impaired (raft-excluded) CD44 mutants in non-invasive MCF-10a cells was sufficient to reversibly induce the phenotypic appearance of epithelial-to-mesenchymal transition and to increase cell motility. Interestingly, cell migration was associated with temporal reductions in CD44 palmitoylation in wild-type breast cells. Finally, the relevance of these findings is underscored by the fact that levels of palmitoylated CD44 were lower in primary cultures from invasive ductal carcinomas relative to non-tumour tissue, while CD44 co-localisation with a lipid raft marker was less in invasive ductal carcinoma relative to ductal carcinoma in situ cultures. Conclusion Our results support a novel mechanism whereby CD44 palmitoylation and consequent lipid raft affiliation inversely regulate breast cancer cell migration, and may act as a new therapeutic target in breast cancer metastasis.