Diacylglycerol kinase (DGK) is involved in intracellular signal transduction as a regulator of levels of diacylglycerol which leads to protein kinase C activation. Previous studies have revealed that DGK consists of a family of isozymes in mammalian species and that most if not all of them show abundant expression in the central nervous system, suggesting the importance of this enzyme in neuronal function. Among the isozymes, DGK zeta (previously also known as DGK-IV for the rat clone) has unique structural features, such as four ankyrin-like repeats and a nuclear localization signal (NLS), and shows intense mRNA expression in neurons of the olfactory bulb, hippocampus and cerebral and cerebellar cortices (Goto, K. & Kondo, H. (1996), Proc. Natl Acad. Sci. USA, 93, 11196-11201). However, previous studies have given conflicting results about whether or not DGK zeta localizes to the nucleus in these cells. In this study, we have used immunohistochemistry with specific antibodies in brain tissues and cDNA transfection into primary cultured neurons to address this question. We have shown that, while DGK zeta is primarily a nuclear protein in neurons, it can also be cytoplasmic in some conditions, and the subcellular location depends not only on the cell type but also on the developmental state or growth conditions of the cell. In addition, we have used deletion mutants to show that nuclear transport of DGK zeta depends on a cooperative interaction between the NLS and the C-terminal region including ankyrin repeats in a manner which suggests that the NLS is a cryptic site whose exposure is regulated by the C-terminal region. Together, these results support the hypothesis that the localization of DGK zeta may be regulated by differential expression of these various proteins which interact with its C-terminal region.