Diacylglycerol kinases (DGKs) play important roles in restraining diacylglycerol (DAG)-mediated signaling. Within the DGK family, the ζ isoform appears to be the most important isoform in T cells for controlling their development and function. DGKζ has been demonstrated to regulate T cell maturation, activation, anergy, effector/memory differentiation, defense against microbial infection, and antitumor immunity. Given its critical functions, DGKζ function should be tightly regulated to ensure proper signal transduction; however, mechanisms that control DGKζ function are still poorly understood. We report here that DGKζ dynamically translocates from the cytosol into the nuclei in T cells after TCR stimulation. In mice, DGKζ mutant defective in nuclear localization displayed enhanced ability to inhibit TCR-induced DAG-mediated signaling in primary T cells, maturation of conventional αβT and iNKT cells, and activation of peripheral T cells compared with WT DGKζ. Our study reveals for the first time nuclear sequestration of DGKζ as a negative control mechanism to spatially restrain it from terminating DAG mediated signaling in T cells. Our data suggest that manipulation of DGKζ nucleus-cytosol shuttling as a novel strategy to modulate DGKζ activity and immune responses for treatment of autoimmune diseases and cancer.