Diacylglycerol kinase is a member of the diacylglycerol kinase family of enzymes, which generate phosphatidic acid through diacylglycerol phosphorylation. In addition to the catalytic and cysteine-rich domains found in all diacylglycerol kinases, diacylglycerol kinase has a MARCKS domain as well as a C-terminal region containing four ankyrin repeats and a PDZ-binding motif. Previous reports demonstrated that diacylglycerol kinase interaction with several proteins is an important mechanism for modulating the localization and activity of this enzyme. Here we used a proteomic approach to search for novel diacylglycerol kinase interacting proteins, and identified sorting nexin 27 (SNX27), a recently described member of a protein family involved in intracellular trafficking, which has a PDZ domain in addition to the PX domain characteristic of SNX proteins. Co-immunoprecipitation studies and two-hybrid analysis confirmed physical, PDZ-dependent association between SNX27 and diacylglycerol kinase . Since diacylglycerol kinase is expressed abundantly in T lymphocytes, we characterized SNX27 expression and subcellular localization in these cells. SNX27 co-localized with transferrin receptor-positive vesicles, pointing to its participation in T cell endocytic recycling. Expression of deletion mutants revealed that in addition to the PX domain, the SNX27 PDZ domain contributed to vesicle localization of this protein, suggesting that interaction with diacylglycerol kinase regulates SNX27 localization. Analysis of cells with RNAi-mediated knockdown of diacylglycerol kinase showed accelerated transferrin receptor exit from the lymphocyte endocytic recycling compartment back to the plasma membrane, further confirming diacylglycerol kinase -dependent control of vesicle trafficking. These data support a previously unreported role for diacylglycerol kinase in the modulation of membrane trafficking, which may also help to define SNX27 function.