Prenylation (also known as isoprenylation or lipidation) is the addition of hydrophobic molecules to a protein or a biomolecule. It is usually assumed that prenyl groups (3-methylbut-2-en-1-yl) facilitate attachment to cell membranes, similar to lipid anchors like the GPI anchor, though direct evidence of this has not been observed. Prenyl groups (also called isoprenyl groups, having one hydrogen atom more than isoprene) have been shown to be important for protein¨Cprotein binding through specialized prenyl-binding domains.Farnesylation is a type of prenylation, a post-translational modification of proteins by which an isoprenyl group is added to a cysteine residue. It is an important process to mediate protein¨Cprotein interactions and protein¨Cmembrane interactions.

Reference
Wiki: Farnesylation