Natural regulatory T (nT_reg) cells are important for maintaining tolerance to self- and foreign antigens, and they are thought to develop from thymocytes that receive strong T cell receptor (TCR)–mediated signals in the thymus. TCR engagement leads to the activation of phospholipase C–γ1, which generates the lipid second messenger diacylglycerol (DAG) from phosphatidylinositol 4,5-bisphosphate. We used mice that lack the ζ isoform of DAG kinase (DGKζ), which metabolizes DAG to terminate its signaling, to enhance TCR-mediated signaling and identify critical signaling events in nT_reg cell development. Loss of DGKζ resulted in increased numbers of thymic CD25⁺Foxp3⁻CD4⁺ nT_reg cell precursors and Foxp3⁺CD4⁺ nT_reg cells in a cell-autonomous manner. DGKζ-deficient T cells exhibited increased nuclear translocation of the nuclear factor κB subunit c-Rel, as well as enhanced extracellular signal–regulated kinase (ERK) phosphorylation in response to TCR stimulation, suggesting that these downstream pathways may contribute to nT_reg cell development. Indeed, reducing c-Rel abundance or blocking ERK phosphorylation abrogated the increased generation of nT_reg cells by DGKζ-deficient thymocytes. The extent of ERK phosphorylation correlated with TCR-mediated acquisition of Foxp3 in immature thymocytes in vitro. Furthermore, the development of nT_reg cells was augmented in mice in which ERK activation was selectively enhanced in T cells. Together, these data suggest that DGKζ regulates the development of nT_reg cells by limiting the extent of activation of the ERK and c-Rel signaling pathways.