C-terminal isoprenylation is necessary for the small GTPase Rab5 to associate with early endosomes and to exert its regulatory function in endocytosis. In this study, we tested whether Rab5 could retain its membrane association and biological function if the isoprenylation were replaced by another type of lipid modification (myristoylation). Rab5 mutants were constructed that contained both isoprenylation and myristoylation (Gag-Rab5), myristoylation only (Gag-Rab5 delta C4), and neither of the modifications (Rab5 delta C4), respectively. These mutants and wild-type Rab5 were expressed, via a Sindbis virus vector, in cultured BHK-21 cells and their membrane association and biological activity (stimulation of endocytosis) were examined. Wild-type Rab5 was isoprenylated, membrane associated, and biologically active. With additional myristoylation, Gag-Rab5 showed increased affinity for membranes but decreased biological activity. Rab5 delta C4 contained no lipid modifications, failed to associate with membranes, and had no biological activity. With myristoylation (Gag-Rab5 delta C4), there was a significant increase in membrane association (approximately 30%). However, this increased membrane association did not result in any recovery of Rab5 activity. In light of these data, we conclude that N-terminal myristoylation cannot functionally replace the C-terminal isoprenylation of Rab5. Furthermore, myristoylation of Rab5 (Gag-Rab5) interferes with its normal function.