A method for O- and S-palmitoylation of non-protected peptides has been developed. The peptides are treated with excess of palmitoyl chloride in 100% trifluoroacetic acid for 10 min at room temperature. The acidic conditions prevent acylation of amino groups, which is only significant after prolonged treatment (hours to days). The tripeptides Gly-Cys-Phe and Gly-Ser-Phe were converted into the respective S- and O-palmitoylated compounds, and the hydrophobic pulmonary surfactant protein-C model peptides, LRIPCCPVNLKRLLVVV [SP-C(1-17)] and FGIPSSPVLKRLLILLLLLLLILLLILGALLMGL [SP-C(Leu)] were converted into their respective S,S- and O,O-dipalmitoylated peptides. The reactions were virtually quantitative, and the palmitoylated peptides were isolated in about 75-80% yield after reversed-phase HPLC purification. CD spectroscopy showed that S, S-dipalmitoylation of SP-C(1-17) affects the peptide secondary structure (substantial increase in the alpha-helix content) in dodecylphosphocholine micelles.