Hydrolyzes fatty acids from S-acylated cysteine residues in proteins (PubMed:26701913). Has depalmitoylating activity towards NRAS (PubMed:26701913). Has depalmitoylating activity towards DLG4/PSD95 (PubMed:26701913). May have depalmitoylating activity towards MAP6 (By similarity). H2O + S-hexadecanoyl-L-cysteinyl-[protein] = H(+) + hexadecanoate + L-cysteinyl-[protein] Inhibited by palmostatin-B. Palmitoylated on cysteine residues located in a cysteine cluster at the N-terminus which promotes membrane localization (PubMed:26701913). Palmitoylation is required for post-synaptic localization and for depalmitoylating activity towards DLG4/PSD95 (By similarity). Belongs to the AB hydrolase superfamily. ABHD17 family.