Diacylglycerol (DAG) plays a central role in both the synthesis of complex lipids and in intracellular signalling; diacylglycerol kinase (DGK) catalyzes the phosphorylation of DAG, which yields phosphatidic acid. A family of DGKs has been identified in multicellular organisms over the past few years, but the physiological function(s) of this diversity is not clear. One clue has come from Drosophila DGK2, rdgA, since mutations in this gene cause retinal degeneration. We isolated a novel DGK, which we designated DGKι, from human retina and brain libraries. DGKι contains two cysteine- rich repeats, a region similar to the phosphorylation site domain of myristoylated alanine-rich C kinase substrate, a conserved catalytic domain, and four ankyrin repeats at its C terminus. By primary structure, it is most similar to human DGKζ and Drosophila rdgA. An > 12-kilobase mRNA for DGKι was detected only in brain and retina among the tissues examined. In cells transfected with the DGKι cDNA, we detected an approximately 130-kDa protein by immunoassay, and activity assays demonstrated that it encodes a functional DAG kinase. The protein was found to be in both the cytoplasm and nucleus with the localization controlled by PKC isoforms α and γ. The gene encoding DGKι was localized to human chromosome 7q32.3-33, which is known to be a locus for an inherited form of retinitis pigmentosa. These results have defined a novel isoform of DAG kinase, which may have important cellular functions in the retina and brain.