Diacylglycerol kinases (DGKs) terminate signalling from diacylglycerol by converting it to phosphatidic acid^,,,,,,,. Diacylglycerol regulates cell growth and differentiation, and its transient accumulation in the nucleus may be particularly important in this regulation,. Here we show that a fraction of DGK-ζ is found inthe nucleus, where it regulates the amount of nuclear diacylglycerol. Reducing nuclear diacylglycerol levels by conditional expression of DGK-ζ attenuates cell growth. The nuclear-localization signal of DGK-ζ is located in a region that is homologous to the phosphorylation-site domain of the MARCKS protein. This is, to our knowledge, the first evidence that this domain, which is amajor target for protein kinase C, can localize a protein to thenucleus. Two isoforms of protein kinase C, but not others, regulate the localization of DGK-ζ. Our results define a cycle in which diacylglycerol activates protein kinase C, which then regulates the metabolism of diacylglycerol by alternating the intracellular location of DGK-ζ. This may be a general mechanism to control mitogenic signals that depend on nuclear diacylglycerol.