Diacylglycerol kinase (DGK) terminates diacylglycerol (DAG) signaling by phosphorylating DAG to produce phosphatidic acid, which also has signaling properties. Thus, precise control of DGK activity is essential for proper signal transduction. We demonstrated previously that a peptide corresponding to the myristoylated alanine-rich C kinase substrate (MARCKS) phosphorylation site domain (PSD) in DGK zeta was phosphorylated in vitro by an active fragment of protein kinase C (PKC). In the present study, we tested full-length DGK zeta and found that PKC alpha phosphorylated DGK zeta on serines within the MARCKS PSD in vitro and in vivo. DGK zeta also coimmunoprecipitated with PKC alpha, suggesting that they reside in a regulated signaling complex. We then tested whether phosphorylation affected DAG kinase activity. We found that a mutant (DGK zeta S/D) in which serines within the MARCKS PSD were altered to aspartates (to mimic phosphorylation) had lower activity compared with wild-type DGK zeta or a control mutant (DGK zeta S/N) in which the same serines were changed to asparagines. Furthermore, activation of PKC alpha by phorbol 12-myristate 13-acetate inhibited the activity of wild-type DGK zeta, but not DGK zeta S/D, in human embryonic kidney 293 cells. These results suggest that by phosphorylating the MARCKS PSD, PKC alpha attenuates DGK zeta activity. Supporting this, we found that cells expressing DGK zeta S/D had higher DAG levels and grew more rapidly compared with cells expressing DGK zeta S/N that could not be phosphorylated. Taken together, these results indicate that PKC alpha phosphorylates DGK zeta in cells, and this phosphorylation inhibits its kinase activity to remove cellular DAG, thereby affecting cell growth.