Epidermal growth factor receptor (EGFR) activation is negatively regulated by protein kinase C (PKC) signaling. Stimulation of A431 cells with EGF, bradykinin or UTP increased EGFR phosphorylation at Thr654 in a PKC-dependent manner. Inhibition of PKC signaling enhanced EGFR activation, as assessed by increased phosphorylation of Tyr845 and Tyr1068 residues of the EGFR. Diacylglycerol is a physiological activator of PKC that can be removed by diacylglycerol kinase (DGK) activity. We found, in A431 and HEK293 cells, that the DGKθ isozyme translocated from the cytosol to the plasma membrane, where it co-localized with the EGFR and subsequently moved into EGFR-containing intracellular vesicles. This translocation was dependent on both activation of EGFR and PKC signaling. Furthermore, DGKθ physically interacted with the EGFR and became tyrosine-phosphorylated upon EGFR stimulation. Overexpression of DGKθ attenuated the bradykinin-stimulated, PKC-mediated EGFR phosphorylation at Thr654, and enhanced the phosphorylation at Tyr845 and Tyr1068. SiRNA-induced DGKθ downregulation enhanced this PKC-mediated Thr654 phosphorylation. Our data indicate that DGKθ translocation and activity is regulated by the concerted activity of EGFR and PKC and that DGKθ attenuates PKC-mediated Thr654 phosphorylation that is linked to desensitisation of EGFR signaling.