Pancreatic islet beta cells are particularly susceptible to endoplasmic reticulum (ER) stress, which is implicated in beta cell dysfunction and loss during the pathogenesis of type 1 diabetes (T1D). The peripheral membrane protein GAD65 is an autoantigen in human T1D. GAD65 synthesizes GABA, an important autocrine and paracrine signaling molecule and a survival factor in islets. We show that ER stress in primary beta cells perturbs the palmitoylation cycle controlling GAD65 endomembrane distribution, resulting in aberrant accumulation of the palmitoylated form in trans-Golgi membranes. The palmitoylated form has heightened immunogenicity, exhibiting increased uptake by antigen presenting cells and T cell stimulation compared to the non-palmitoylated form. Similar accumulation of GAD65 in Golgi membranes is observed in human beta cells in pancreatic sections from GAD65 autoantibody positive individuals, who have not yet progressed to clinical onset of T1D, and T1D patients with residual beta cell mass and ongoing T cell infiltration of islets. We propose that aberrant accumulation of immunogenic GAD65 in Golgi membranes facilitates inappropriate presentation to the immune system following release from stressed and/or damaged beta cells, triggering autoimmunity.