SARS-CoV-2 virions are surrounded by a lipid bilayer that contains membrane proteins such as spike, responsible for target-cell binding and virus fusion. We found that during SARS-CoV-2 infection, spike becomes lipid modified, through the sequential action of the S-acyltransferases ZDHHC20 and 9. Particularly striking is the rapid acylation of spike on 10 cytosolic cysteines within the ER and Golgi. Using a combination of computational, lipidomics, and biochemical approaches, we show that this massive lipidation controls spike biogenesis and degradation, and drives the formation of localized ordered cholesterol and sphingolipid-rich lipid nanodomains in the early Golgi, where viral budding occurs. Finally, S-acylation of spike allows the formation of viruses with enhanced fusion capacity. Our study points toward S-acylating enzymes and lipid biosynthesis enzymes as novel therapeutic anti-viral targets.