Proliferation of T lymphocytes is triggered by the interaction of interleukin 2 (IL-2) with its high affinity specific receptor that is expressed on the cell surface following T lymphocyte activation. Significant advances have recently been made in identifying the multiple signals that follow IL-2 receptor occupancy, although the exact mechanism responsible for IL-2-induced proliferation remains an enigma. It has been shown previously that unique species of phosphatidic acid are rapidly produced in vivo following IL-2 binding. It was then suggested that, in contrast to other eukaryotic growth factor systems, phosphatidic acid was at least in part generated through IL-2-induced diacylglycerol (DG) kinase activation. In the present study we demonstrate IL-2-dependent activation of the alpha isoform of DG kinase. Confocal microscopy studies reveal that the enzyme is located in the cytosol and nuclei of resting T cells. Interleukin 2 stimulation induces translocation of the enzyme to the perinuclear region. Furthermore, our results indicate that inhibition of the alpha isoform of DG kinase has a profound effect on IL-2-induced T cell growth. Studies on cell cycle distribution demonstrate that the inhibition of IL-2-induced phosphatidic acid production induces arrest in late G1 phase of IL-2 dependent cells. Altogether, these results link previous observations of interleukin 2 and phosphatidic acid production to activation of an specific isoform of DG kinase and suggest that activation of this enzyme is part of a novel signaling cascade that utilizes phosphatidic acid as an effector molecule.