Both diacylglycerol (DAG) and phosphatidic acid (PA) are important second messengers involved in signal transduction from many immune cell receptors and can be generated and metabolized through multiple mechanisms. Recent studies indicate that diacylglycerol kinases (DGKs), the enzymes that catalyze phosphorylation of DAG to produce PA, play critical roles in regulating the functions of multiple immune cell lineages. In T cells, two DGK isoforms, alpha and zeta, inhibit DAG-mediated signaling following T-cell receptor engagement and prevent T-cell hyperactivation. DGK alpha and zeta synergistically promote T-cell anergy and are critical for T-cell tolerance. In mast cells, DGKzeta plays differential roles in their activation by promoting degranulation but attenuating cytokine production following engagement of the high affinity receptor for immunoglobulin E. In dendritic cells and macrophages, DGKzeta positively regulates Toll-like receptor-induced proinflammatory cytokine production through its product PA and is critical for host defense against Toxoplasma gondii infection. These studies demonstrate pivotal roles of DGKs in regulating immune cell function by acting both as signal terminator and initiator.