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An extensive body of work has documented the antioxidant role of xanthophylls (lutein and zeaxanthin) in human health and specifically how they provide photoprotection in human vision. More recently, evidence is emerging for the transcriptional regulation of antioxidant response by lutein/lutein cleavage products, similar to the role of β-carotene cleavage products in the modulation of retinoic acid receptors. Supplementation with xanthophylls also provides additional benefits for the prevention of age-related macular degeneration (AMD) and attenuation of Alzheimer’s disease symptoms. Mammalian β-carotene oxygenase 2 (BCO2) asymmetrically cleaves xanthophylls as well as β-carotene in vitro. We recently demonstrated that mouse BCO2 (mBCO2) is a functionally palmitoylated enzyme and that it loses palmitoylation when cells are treated with β-carotene. The mouse enzyme is the easiest model to study mammalian BCO2 because it has only one isoform, unlike human BCO2 with several major isoforms with various properties. Here, we used the same acyl-RAC methodology and confocal microscopy to elucidate palmitoylation and localization status of mBCO2 in the presence of xanthophylls. We created large unilamellar vesicle-based nanocarriers for the successful delivery of xanthophylls into cells. We demonstrate here that, upon treatment with low micromolar concentration of lutein (0.15 µM), mBCO2 is depalmitoylated and shows partial nuclear localization (38.00 ± 0.04%), while treatment with zeaxanthin (0.45 µM) and violaxanthin (0.6 µM) induces depalmitoylation and protein translocation from mitochondria to a lesser degree (20.00 ± 0.01% and 35.00 ± 0.02%, respectively). Such a difference in the behavior of mBCO2 toward various xanthophylls and its translocation into the nucleus in the presence of various xanthophylls suggests a possible mechanism for transport of lutein/lutein cleavage products to the nucleus to affect transcriptional regulation.