Rho GTPases share a common inhibitor, Rho guanine nucleotide dissociation inhibitor (RhoGDI), which regulates their expression levels, membrane localization, and activation state. The selective dissociation of individual Rho GTPases from RhoGDI ensures appropriate responses to cellular signals, but the underlying mechanisms are unclear. Diacylglycerol kinase ζ (DGKζ), which phosphorylates diacylglycerol to yield phosphatidic acid, selectively dissociates Rac1 by stimulating PAK1-mediated phosphorylation of RhoGDI on Ser-101/174. Similarly, phosphorylation of RhoGDI on Ser-34 by protein kinase Cα (PKCα) selectively releases RhoA. Here we show DGKζ is required for RhoA activation and Ser-34 phosphorylation, which were decreased in DGKζ-deficient fibroblasts and rescued by wild-type DGKζ or a catalytically inactive mutant. DGKζ bound directly to the C-terminus of RhoA and the regulatory arm of RhoGDI and was required for efficient interaction of PKCα and RhoA. DGKζ-null fibroblasts had condensed F-actin bundles and altered focal adhesion distribution, indicative of aberrant RhoA signaling. Two targets of the RhoA effector ROCK showed reduced phosphorylation in DGKζ-null cells. Collectively our findings suggest DGKζ functions as a scaffold to assemble a signaling complex that functions as a RhoA-selective, GDI dissociation factor. As a regulator of Rac1 and RhoA activity, DGKζ is a critical factor linking changes in lipid signaling to actin reorganization.