The nucleotide-binding domain (NBD), leucine-rich repeat (LRR), and pyrin domain (PYD)-containing protein 3 (NLRP3) inflammasome is a critical mediator of the innate immune response. How NLRP3 responds to stimuli and initiates the assembly of the NLRP3 inflammasome is not fully understood. Here, we found that a cellular metabolite, palmitate, facilitates NLRP3 activation by enhancing its S-palmitoylation, in synergy with lipopolysaccharide stimulation. NLRP3 is post-translationally palmitoylated by zinc-finger and aspartate-histidine-histidine-cysteine 5 (ZDHHC5) at the LRR domain, which promotes NLRP3 inflammasome assembly and activation. Silencing ZDHHC5 blocks NLRP3 oligomerization, NLRP3-NEK7 interaction, and formation of large intracellular ASC aggregates, leading to abrogation of caspase-1 activation, IL-1β/18 release, and GSDMD cleavage, both in human cells and in mice. ABHD17A depalmitoylates NLRP3, and one human-heritable disease-associated mutation in NLRP3 was found to be associated with defective ABHD17A binding and hyper-palmitoylation. Furthermore, Zdhhc5^−/− mice showed defective NLRP3 inflammasome activation in vivo. Taken together, our data reveal an endogenous mechanism of inflammasome assembly and activation and suggest NLRP3 palmitoylation as a potential target for the treatment of NLRP3 inflammasome-driven diseases.