Acid-sensing ion channel 3 (ASIC3) is a H⁺-gated cation channel primarily found in sensory neurons, where it may function as a pH sensor in response to metabolic disturbances or painful conditions. We previously found that ASIC3 interacts with the post-synaptic density protein, PSD-95, through its C-terminus, which leads to a decrease in ASIC3 cell surface expression and H⁺-gated current. PSD-95 has been implicated in recruiting proteins to lipid rafts, which are membrane micro-domains rich in cholesterol and sphingolipids that organize receptor/signaling complexes. We found ASIC3 and PSD-95 coimmunoprecipitated within detergent-resistant membrane fractions. When cells were exposed to methyl--cyclodextrin to deplete membrane cholesterol and disrupt lipid rafts, PSD-95 localization to lipid raft fractions was abolished and it no longer inhibited ASIC3 current. Likewise, mutation of two cysteine residues in PSD-95 that undergo palmitoylation (a lipid modification that targets PSD-95 to lipid rafts) prevented its inhibition of ASIC3 current and cell surface expression. Additionally, we found that cell surface ASIC3 is enriched in the lipid raft fraction. These data suggest that PSD-95 and ASIC3 interact within lipid rafts and this raft interaction is required for PSD-95 to modulate ASIC3.