Most HIV-1 Tat is unconventionally secreted by infected cells following Tat interaction with phosphatidylinositol (4,5) bisphosphate (PI(4,5)P2) at the plasma membrane. Extracellular Tat is endocytosed by uninfected cells before escaping from endosomes to reach the cytosol and bind PI(4,5)P2. It is not clear whether and how incoming Tat concentrates in uninfected cells. Here we show that, in uninfected cells, the S-acyl transferase DHHC-20 together with the prolylisomerases cyclophilin A (CypA) and FKBP12 palmitoylate Tat on Cys31 thereby increasing Tat affinity for PI(4,5)P2. In infected cells, CypA is bound by HIV-1 Gag, resulting in its encapsidation and CypA depletion from cells. Because of the lack of this essential cofactor, Tat is not palmitoylated in infected cells but strongly secreted. Hence, Tat palmitoylation specifically takes place in uninfected cells. Moreover, palmitoylation is required for Tat to accumulate at the plasma membrane and affect PI(4,5)P2-dependent membrane traffic such as phagocytosis and neurosecretion.