The transmembrane sodium-calcium (Na-Ca) exchanger 1 (NCX1) regulates cytoplasmic Ca levels by facilitating electrogenic exchange of Ca for Na. Palmitoylation, the only reversible post-translational modification known to modulate NCX1 activity, controls NCX1 inactivation. Here, we show that palmitoylation of NCX1 modifies the structural arrangement of the NCX1 dimer and controls its affinity for lipid-ordered membrane domains. NCX1 palmitoylation occurs dynamically at the cell surface under the control of the enzymes zDHHC5 and APT1. We identify the position of the endogenous exchange inhibitory peptide (XIP) binding site within the NCX1 regulatory intracellular loop and demonstrate that palmitoylation controls the ability of XIP to bind this site. We also show that changes in NCX1 palmitoylation change cytosolic Ca. Our results thus demonstrate the broad molecular consequences of NCX1 palmitoylation and highlight a means to manipulate the inactivation of this ubiquitous ion transporter that could ameliorate pathologies linked to Ca overload via NCX1.