Paltauf was last seen at approximately 8:30 p.m. on July 7, 2006 at a Budget Inn hotel in the vicinity of Interstate 35 and Rundberg in Austin, Texas. She had checked into the hotel with her boyfriend to celebrate their second anniversary. She planned to spend a few days with him, but they got into an argument and she left angrily, carrying only her identification. Paltauf's boyfriend tried to follow her, but she told him to leave her alone so he went back to their room. Approximately 20 minutes later he went looking for her again but could not find her. She has never been heard from again. Her boyfriend called her mother the following day, and her mother reported her disappearance to police.

Paltauf left behind all her personal belongings including her clothing, shoes, purse and cellular phone, which is uncharacteristic of her. Her boyfriend returned the cellular phone to her family on July 12. Over three hundred calls were placed on it between July 8 and July 12; many of them were to Paltauf's boyfriend's ex-girlfriend in New Mexico. She stated she never answered any of the calls, but phone records indicate that she did and had several conversations ranging from one to forty-nine minutes in length.

Paltauf's family describes her as a responsible teenager who was devoted to her four younger siblings. At the time of her disappearance she was studying for her General Equivalency Diploma (GED) and dreamed of becoming a fashion designer. Her mother believes foul play was involved in her disappearance; it remains unsolved.