DGK-ζ is a negative regulator of TCR signaling that causes degradation of the second messenger DAG, terminating DAG-mediated activation of Ras and PKCθ. Cytotoxic T cells deficient in DGK-ζ demonstrate enhanced effector functions in vitro and antitumor activity in vivo, perhaps because of insensitivity to inhibitory cytokines. We sought to determine whether the enhanced responsiveness of DGK-ζ-deficient T cells renders them insensitive to the inhibitory cytokine TGF-β and to determine how the loss of DGK-ζ facilitates this insensitivity. We identified decreased transcriptional and functional responses to TGF-β in CD8(+) DGK-ζ(-/-) T cells but preserved TGF-β-mediated conversion of naïve DGK-ζ(-/-) CD4(+) T cells to a regulatory T cell phenotype. Decreased CD8(+) T cell responsiveness to TGF-β did not result from impaired canonical TGF-β signal transduction, because similar levels of TGF-β-R and intracellular Smad components were identified in WT and DGK-ζ(-/-) CD8(+) T cells, and TGF-β-mediated activation of Smad2 was unchanged. Instead, an enhanced TCR signal strength was responsible for TGF-β insensitivity, because (i) loss of DGK-ζ conferred resistance to TGF-β-mediated inhibition of Erk phosphorylation, (ii) TGF-β insensitivity could be recapitulated by exogenous addition of the DAG analog PMA, and (iii) TGF-β sensitivity could be observed in DGK-ζ-deficient T cells at limiting dilutions of TCR stimulation. These data indicate that enhanced TCR signal transduction in the absence of DGK-ζ makes T cells relatively insensitive to TGF-β, in a manner independent of Smads, a finding with practical implications in the development of immunotherapies that target TGF-β.