Wnt proteins regulate a large number of processes, including cellular growth, differentiation, and tissue homeostasis, through the highly conserved Wnt signaling pathway in metazoans. Porcupine (PORCN) is an endoplasmic reticulum (ER)-resident integral membrane enzyme that catalyzes posttranslational modification of Wnts with palmitoleic acid, an unsaturated lipid. This unique form of lipidation with palmitoleic acid is a vital step in the biogenesis and secretion of Wnt, and PORCN inhibitors are currently in clinical trials for cancer treatment. However, PORCN-mediated Wnt lipidation has not been reconstituted in vitro with purified enzyme. Here, we report the first successful purification of human PORCN and confirm, through in vitro reconstitution with the purified enzyme, that PORCN is necessary and sufficient for Wnt acylation. By systematically examining a series of substrate variants, we show that PORCN intimately recognizes the local structure of Wnt around the site of acylation. Our in vitro assay enabled us to examine the activity of PORCN with a range of fatty acyl-CoAs with varying length and unsaturation. The selectivity of human PORCN across a spectrum of fatty acyl-CoAs suggested that the kink in the unsaturated acyl chain is a key determinant of PORCN-mediated catalysis. Finally, we show that two putative PORCN inhibitors that were discovered with cell-based assays indeed target human PORCN. Together, these results provide discrete, high-resolution biochemical insights into the mechanism of PORCN-mediated Wnt acylation and pave the way for further detailed biochemical and structural studies.