Multiple genome-wide association studies have linked diacylglycerol kinase η (DGKη) to bipolar disorder (BPD). Moreover, DGKη expression is increased in tissue from patients with BPD. How increased levels of this lipid kinase might affect cellular functions is currently unclear. Here, we overexpressed mouse DGKη in human embryonic kidney 293 cells to examine substrate specificity and signaling downstream of endogenous G protein-coupled receptors (GPCRs). We found that DGKη can phosphorylate diacylglycerol (DAG) with different acyl side chains (8:0, 12:0, 18:1). In addition, overexpression of DGKη enhanced calcium mobilization after stimulating muscarinic receptors with carbachol and after stimulating purinergic receptors with ATP. This effect required DGKη catalytic activity, as assessed using a kinase-dead (G389D) mutant and multiple truncation constructs. DGKη was localized throughout the cytosol and did not translocate to the plasma membrane after stimulation with carbachol. Since protein kinase C (PKC) can be activated by DAG and promotes receptor desensitization, we also examined functional interactions between PKC and DGKη. We found that acute activation of PKC with phorbol 12-myristate 13-acetate shortened carbachol-evoked calcium responses and occluded the effect of overexpressed DGKη. Moreover, inhibition of PKC activity with bisindolylmaleimide I (BIM I) produced the same enhancing effect on carbachol-evoked calcium mobilization as overexpressed DGKη, and overexpression of DGKη produced no additional effect on calcium mobilization in the presence of BIM I. Taken together, our data suggest that DGKη enhances GPCR signaling by reducing PKC activation.