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Prenylation or isoprenylation or lipidation is the addition of hydrophobic molecules to a protein. It is usually assumed that prenyl groups facilitate attachment to cell membranes, similar to lipid anchor like the GPI anchor, though direct evidence is missing. Prenyl groups have been shown to be important for protein-protein binding through specialized prenyl-binding domains.

Protein prenylation involves the transfer of either a farnesyl or a geranyl-geranyl moiety to C-terminal cysteine(s) of the target protein. There are three enzymes that carry out prenylation in the cell.

Rab geranylgeranyltransferase, or Geranylgeranyl transferase II, transfers (usually) two geranylgeranyl groups to the cystein(s) at the C-terminus of Rab proteins. The C-terminus of Rab proteins varies in length and sequence and is referred to as hypervariable. Thus Rab proteins do not have a consensus sequence, such as the CAAX box, which the Rab geranylgeranyl transferase can recognise. Instead Rab proteins are bound by the Rab escort protein (REP) over a more conserved region of the Rab protein and then presented to the Rab geranylgeranyltransferase. Once Rab proteins are prenylated the lipid anchor(s) ensure that Rabs are no longer soluble. REP therefore plays an important role in binding and solubilising the geranylgeranyl groups and delivers the Rab protein to the relevant cell membrane.

Both isoprenoid chains geranylgeranyl pyrophosphate (GGpp) and farnesyl pyrophosphate are products of the HMG-CoA reductase pathway. The product of HMG CoA reductase is mevalonate. By combining precursors with 5 carbons, the pathway subsequently produces geranyl pyrophosphate (10 carbons), farnesyl pyrophosphate (15 carbons) and geranylgeranyl pyrophosphate (20 carbons). Two farnesyl pyrophosphate groups can also be combined to form squalene, the precursor for cholesterol This means that statins, which inhibit HMG CoA reductase, inhibit the production of both cholesterol and isoprenoids.

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