Proper localization of receptors for synaptic organizing factors is crucial for synapse formation. Wnt proteins promote synapse assembly through Frizzled (Fz) receptors. In hippocampal neurons, the surface and synaptic localization of Fz5 is regulated by neuronal activity, but the mechanisms involved remain poorly understood. Here, we report that all Fz receptors can be post-translationally modified by S-acylation and that Fz5 is S-acylated on three C-terminal cysteines by zDHHC5. S-acylation is essential for Fz5 localization to the cell surface, axons, and presynaptic sites. Notably, S-acylation-deficient Fz5 is internalized faster, affecting its association with signalosome components at the cell surface. S-acylation-deficient Fz5 also fails to activate canonical and divergent canonical Wnt pathways. Fz5 S-acylation levels are regulated by the pattern of neuronal activity. In vivo studies demonstrate that S-acylation-deficient Fz5 expression fails to induce presynaptic assembly. Our studies show that S-acylation of Frizzled receptors is a mechanism controlling their localization and function.