Diacylglycerol kinase (DGK) phosphorylates diacylglycerol to phosphatidic acid, modifying the cellular levels of these two lipid mediators. Ten DGK isoforms, grouped into five subtypes, are found in higher organisms. All contain a conserved C-terminal domain and at least two cysteine-rich motifs of unknown function. DGK is a type I enzyme that acts as a negative modulator of diacylglycerol-based signals during T cell activation. Here we studied the functional role of the DGK domains using mutational analysis to investigate membrane binding in intact cells. We show that the two atypical C1 domains are essential for plasma membrane targeting of the protein in intact cells, but unnecessary for catalytic activity. We also identify the C-terminal sequence of the protein as essential for membrane binding. Finally we demonstrate that, in the absence of the calcium-binding domain, receptor-dependent translocation of the truncated protein is regulated by phosphorylation of Tyr335. This functional study provides new insight into the role of the so-called conserved domains of this lipid kinase family and demonstrates the existence of additional domains that confer specific plasma membrane localization to this particular isoform.