The phosphatidylinositol (PI) cycle mediates many cellular events by controlling the metabolism of many lipid second messengers. Diacylglycerol kinase ⑀ (DGK⑀) has an important role in this cycle. DGK⑀ is the only DGK isoform to show inhibition by its product phosphatidic acid (PA) as well as substrate specificity for sn-2 arachidonoyl-diacylglycerol (DAG). Here, we show that this inhibition and substrate specificity are both determined by selectivity for a combination of the sn-1 and sn-2 acyl chains of PA or DAG, respectively, preferring the most prevalent acyl chain composition of lipids involved specifically in the PI cycle, 1-stearoyl-2-arachidonoyl. Although the difference in rate for closely related lipid species is small, there is a significant enrichment of 1-stearoyl-2-arachidonoyl PI because of the cyclical nature of PI turnover. We also show that the inhibition of DGK⑀ by PA is competitive and that the deletion of the hydrophobic segment and cationic cluster of DGK⑀ does not affect its selectivity for the acyl chains of PA or DAG. Thus, this active site not only recognizes the lipid headgroup but also a combination of the two acyl chains in PA or DAG. We propose a mechanism of DGK⑀ regulation where its dual acyl chain selectivity is used to negatively regulate its enzymatic activity in a manner that ensures DGK⑀ remains committed to the PI turnover cycle. This novel mechanism of enzyme regulation within a signaling pathway could serve as a template for the regulation of enzymes in other pathways in the cell.Diacylglycerol kinases (DGK 3 ; EC 2.7.1.107) are a diverse family of lipid kinases that catalyze the phosphorylation of diacylglycerol (DAG) to phosphatidic acid (PA) using ATP as a phosphate donor (1-8). DAG is a lipid second messenger whose importance in cell signaling is well established (9). DAG is generated through the catalyzed hydrolysis of phosphatidylinositol 4,5-bisphosphate (PtdIns(4,5)P 2 ) by the various isoforms of phospholipase C in response to cell stimulation by various agonists such as growth factors, cytokines, and hormones (9, 10). The diverse range of effectors of DAG allows it to modulate a large variety of cellular events, resulting in its broad effects on the cell. Of these effectors, DAG is most known as an allosteric activator of protein kinase C (11-14). DAG also activates other effectors such as Ras-guanyl nucleotide-releasing protein (11) and the transient receptor potential channel 2 (15). Furthermore, DAG is involved in the recruitment of chimerins (16), Munc13, and protein kinase D to the membrane (11). Because DAG is such an important signaling molecule, there must be tight regulation of its concentration. The DGK-catalyzed phosphorylation of DAG to PA serves as one pathway for the attenuation of the pleiotropic effects of DAG.Although the reaction catalyzed by DGK attenuates the effects of DAG, the product of the reaction, PA, is also a lipid second messenger that has its own range of effects on the cell through its own set of diverse effectors. For instance, PA ...