Protein kinase D (PKD) regulates many diverse cellular functions in response to diacylglycerol. To monitor PKD signaling in live cells, we generated a genetically encoded fluorescent reporter for PKD activity, DKAR (D kinase activity reporter). DKAR expressed in mammalian cells undergoes reversible fluorescence resonance energy transfer changes upon activation and inhibition of endogenous PKD. Surprisingly, we find that agonist-evoked activation of PKD is driven not only by diacylglycerol production, but by Ca(2+). Furthermore, elevation of intracellular Ca(2+), in the absence of any other stimulus, is sufficient to activate PKD. Concurrent imaging of Ca(2+), diacylglycerol, and PKD activity reveals that thapsigargin-mediated elevation of intracellular Ca(2+) is closely followed by a robust increase in diacylglycerol production, in turn followed by PKD activation. The Ca(2+)-induced production of diacylglycerol and accompanying PKD activation is dependent on phospholipase C activity. These data reveal that Ca(2+) is a major contributor to the initiation of PKD signaling through positive feedback regulation of diacylglycerol production, unveiling a new mechanism in PKD activation.