Diacylglycerol (DAG) is an important lipid signalling molecule that exerts an effect on various effector proteins including protein kinase C. A main mechanism for DAG removal is to convert it to phosphatidic acid (PA) by DAG kinases (DGKs). However, it is not well understood how DGKs are targeted to specific subcellular sites and tightly regulates DAG levels. The neuronal synapse is a prominent site of DAG production. Here, we show that DGKzeta is targeted to excitatory synapses through its direct interaction with the postsynaptic PDZ scaffold PSD-95. Overexpression of DGKzeta in cultured neurons increases the number of dendritic spines, which receive the majority of excitatory synaptic inputs, in a manner requiring its catalytic activity and PSD-95 binding. Conversely, DGKzeta knockdown reduces spine density. Mice deficient in DGKzeta expression show reduced spine density and excitatory synaptic transmission. Time-lapse imaging indicates that DGKzeta is required for spine maintenance but not formation. We propose that PSD-95 targets DGKzeta to synaptic DAG-producing receptors to tightly couple synaptic DAG production to its conversion to PA for the maintenance of spine density.