Formation of phosphatidic acid by diglyceride kinase (EC 2.7.1.-) in the presence of ATP and Mg(2+) was shown in a homogenate and subcellular fractions of rat cerebral cortex. 2. The kinase was activated by Mg(2+). Ca(2+) activated to a smaller extent but was inhibitory in the presence of optimum concentration of Mg(2+). Activity was greatly increased in the presence of added 1,2-diglyceride. 3. Sodium deoxycholate markedly stimulated the reaction, but other detergents (Cutscum and Triton X-100) did not. 4. Diglyceride kinase was concentrated in the supernatant and microsomal fractions from rat cerebral cortex. The distribution of the kinase in the particulate fractions resembled that of acetylcholinesterase and 5'-nucleotidase. 5. The rate of phosphatidic acid synthesis by the diglyceride kinase route was much greater than reported rates for acylation of 3-glycerophosphate and was also very rapid in comparison with the rates of other steps in the synthesis of phosphoinositides. 6. Acetylcholine had no stimulatory effect on diglyceride kinase of isolated intact nerve-ending particles or of nerve-ending membranes obtained after osmotic shock.