Diacylglycerol kinases (DGKs) metabolize diacylglycerol (DAG) to phosphatidic acid (PA). In T lymphocytes, DGKα acts as a negative regulator of TCR signaling by decreasing diacylglycerol levels and inducing anergy. Here, we show that upon co-stimulation of the TCR with CD28 or SLAM, DGKα, but not DGKζ, exit from the nucleus and undergoes rapid negative regulation of its enzymatic activity. Inhibition of DGKα is dependent on the expression of SAP, an adaptor protein mutated in X-linked lymphoproliferative disease (XLP), which is essential for SLAM-mediated signaling and contributes to TCR/CD28-induced signaling and T cell activation. Accordingly, over-expression of SAP is sufficient to inhibit DGKα, while SAP mutants unable to bind either phospho-tyrosine residues or SH3 domain are ineffective. Moreover phospholipase C activity and calcium, but not Src-family tyrosine kinases, are also required for negative regulation of DGKα. Finally, inhibition of DGKα in SAP-deficient cells partially rescues defective TCR/CD28 signaling, including Ras and ERK-1/2 activation, PKCθ membrane recruitment, induction of NF-AT transcriptional activity and IL-2 production. Thus SAP-mediated inhibition of DGKα sustains diacylglycerol signaling, thereby regulating T cell activation and may represent a novel pharmacological strategy for XLP treatment.