Diacylglycerol kinases (DGKs) catalyze the phosphorylation and conversion of diacylglycerol (DAG) into phosphatidic acid. DGK isozymes have unique primary structures, expression patterns, subcellular localizations, regulatory mechanisms, and DAG preferences. DGK. has a hydrophobic segment that promotes its attachment to membranes and shows substrate specificity for DAG with an arachidonoyl acyl chain in the sn-2 position of the substrate. We determined the role of DGK. in the regulation of energy and glucose homeostasis in relation to diet-induced insulin resistance and obesity using DGK epsilon-KO and wild-type mice. Lipidomic analysis revealed elevated unsaturated and saturated DAG species in skeletal muscle of DGK epsilon KO mice, which was paradoxically associated with increased glucose tolerance. Although skeletal muscle insulin sensitivity was unaltered, whole-body respiratory exchange ratio was reduced, and abundance of mitochondrial markers was increased, indicating a greater reliance on fat oxidation and intracellular lipid metabolism in DGK epsilon KO mice.(jlr) Thus, the increased intracellular lipids in skeletal muscle from DGK epsilon KO mice may undergo rapid turnover because of increased mitochondrial function and lipid oxidation, rather than storage, which in turn may preserve insulin sensitivity. In conclusion, DGK epsilon plays a role in glucose and energy homeostasis by modulating lipid metabolism in skeletal muscle.