Shigella flexneri, an intracellular Gram-negative bacterium causative for shigellosis, employs a type III secretion system to deliver virulence effectors into host cells. One such effector, IcsB, is critical for S. flexneri intracellular survival and pathogenesis, but its mechanism of action is unknown. Here, we discover that IcsB is an 18-carbon fatty acyltransferase catalysing lysine Nε-fatty acylation. IcsB disrupted the actin cytoskeleton in eukaryotes, resulting from Nε-fatty acylation of RhoGTPases on lysine residues in their polybasic region. Chemical proteomic profiling identified about 60 additional targets modified by IcsB during infection, which were validated by biochemical assays. Most IcsB targets are membrane-associated proteins bearing a lysine-rich polybasic region, including members of the Ras, Rho and Rab families of small GTPases. IcsB also modifies SNARE proteins and other non-GTPase substrates, suggesting an extensive interplay between S. flexneri and host membrane trafficking. IcsB is localized on the Shigella-containing vacuole to fatty-acylate its targets. Knockout of CHMP5-one of the IcsB targets and a component of the ESCRT-III complex-specifically affected S. flexneri escape from host autophagy. The unique Nε-fatty acyltransferase activity of IcsB and its altering of the fatty acylation landscape of host membrane proteomes represent an unprecedented mechanism in bacterial pathogenesis.