The majority of bioactive molecules act on membrane proteins or intracellular targets and therefore needs to partition into or cross biological membranes. Natural products often exhibit lipid modifications to facilitate critical molecule-membrane interactions and in many cases their bioactivity is markedly reduced upon removal of a lipid group. However, despite its importance in nature, lipid-conjugation of small molecules is not commonly used in chemical biology and medicinal chemistry, and the effect of such conjugation has not been systematically studied. To understand the composition of lipids found in natural products, we carried out a chemoinformatic characterization of the ‘natural product lipidome’. According to this analysis, lipidated natural products predominantly contain saturated linear medium-length lipids, which are significantly shorter than those found in membranes and lipidated proteins. To study the usefulness of such modifications in probe design, we systematically explored the effect of lipid conjugation on five different small molecule chemotypes and find that permeability, cellular retention, subcellular localization, and bioactivity can be significantly modulated depending on the type of lipid tail used. We demonstrate that medium-length lipid tails can render impermeable molecules cell-permeable and switch on their bioactivity. Saturated medium-length lipids (e.g. C10) are found to be ideal for the bioactivity of small molecules in mammalian cells, while saturated long-chain lipids (e.g. C18) often significantly reduce bioavailability and activity. Together, our findings suggest that conjugation of small molecules with medium-length lipids could be a powerful strategy for the design of probes and drugs.