The discovery of molecules required for membrane fusion has revealed a remarkably conserved mechanism that centers upon the formation of a complex of SNARE proteins. However, whether the SNARE proteins or other components catalyze the final steps of membrane fusion in vivo remains unclear. Understanding this last step depends on the identification of molecules that act late in the fusion process. Here we demonstrate that in Saccharomyces cerevisiae, Vac8p, a myristoylated and palmitoylated armadillo repeat protein, is required for homotypic vacuole fusion. Vac8p is palmitoylated during the fusion reaction, and the ability of Vac8p to be palmitoylated appears to be necessary for its function in fusion. Both in vivo and in vitro analyses show that Vac8p functions after both Rab-dependent vacuole docking and the formation of trans-SNARE pairs. We propose that Vac8p may bind the fusion machinery through its armadillo repeats and that palmitoylation brings this machinery to a specialized lipid domain that facilitates bilayer mixing.