Apoptosis signaling through CD95 (Fas/APO-1) involves aggregation and clustering of the receptor followed by its actin-dependent internalization. Internalization is required for efficient formation of the death-inducing signaling complex (DISC) with maximal recruitment of FADD, caspase-8/10 and c-FLIP occurring when the receptor has reached an endosomal compartment. The first detectable event during CD95 signaling is the formation of SDS-stable aggregates likely reflecting intense oligomerization of the receptor. We now demonstrate that these SDS-stable forms of CD95 correspond to very high molecular weight DISC complexes (hiDISC) and are the sites of caspase-8 activation. hiDISCs are found both inside and outside of detergent-resistant membranes. The formation of SDS-stable CD95 aggregates involves palmitoylation of the membrane proximal cysteine 199 in CD95. Cysteine 199 mutants no longer form SDS-stable aggregates, and inhibition of palmitoylation reduces internalization of CD95 and activation of caspase-8. Our data demonstrate that SDS-stable forms of CD95 are the sites of apoptosis initiation and represent an important early step in apoptosis signaling through CD95 before activation of caspases.