Cell morphology and motility are governed largely by complex signaling networks that ultimately engage the actin cytoskeleton. Understanding how individual circuits contribute to the process of forming cellular structures would be aided greatly by the availability of specific chemical inhibitors. We have used a novel chemical screen in Xenopus cell-free extracts to identify compounds that inhibit signaling pathways regulating actin polymerization. Here we report the results of a high-throughput screen for compounds that inhibit phosphatidylinositol 4,5-bisphosphate (PIP(2))-induced actin assembly and the identification of the first compound, a cyclic peptide, known to block actin assembly by inhibiting an upstream signaling component. We identify the target of this compound as N-WASP, a protein that has been investigated for its role as a node interconnecting various actin signaling networks. We show that this compound prevents activation of the Arp2/3 complex by N-WASP by allosterically stabilizing the autoinhibited conformation of N-WASP.