Apoptosis signaling through CD95 (Fas/APO‐1) involves aggregation and clustering of the receptor followed by its actin‐dependent internalization. Internalization is required for efficient formation of the death‐inducing signaling complex (DISC) with maximal recruitment of FADD, caspase‐8/10 and c‐FLIP occurring when the receptor has reached an endosomal compartment. The first detectable event during CD95 signaling is the formation of SDS‐stable aggregates likely reflecting intense oligomerization of the receptor. We now demonstrate that these SDS‐stable forms of CD95 correspond to very high molecular weight DISC complexes (hiDISC) and are the sites of caspase‐8 activation. hiDISCs are found both inside and outside of detergent‐resistant membranes. The formation of SDS‐stable CD95 aggregates involves palmitoylation of the membrane proximal cysteine 199 in CD95. Cysteine 199 mutants no longer form SDS‐stable aggregates, and inhibition of palmitoylation reduces internalization of CD95 and activation of caspase‐8. Our data demonstrate that SDS‐stable forms of CD95 are the sites of apoptosis initiation and represent an important early step in apoptosis signaling through CD95 before activation of caspases.