Yeast verprolin, encoded by VRP1, is implicated in cell growth, cytoskeletal organization, endocytosis and mitochondrial protein distribution and function. We show that verprolin is also required for bipolar bud-site selection. Previously we reported that additional actin suppresses the temperature-dependent growth defect caused by a mutation in VRP1. Here we show that additional actin suppresses all known defects caused by vrp1-1 and conclude that the defects relate to an abnormal cytoskeleton. Using the two-hybrid system, we show that verprolin binds actin. An actin-binding domain maps to the LKKAET hexapeptide located in the first 70 amino acids. A similar hexapeptide in other acting-binding proteins was previously shown to be necessary for actin-binding activity. The entire 70- amino acid motif is conserved in novel higher eukaryotic proteins that we predict to be actin-binding, and also in the actin-binding proteins, WASP and N-WASP. Verprolin-GFP in live cells has a cell cycle-dependent distribution similar to the actin cortical cytoskeleton. In fixed cells hemagglutinin-tagged Vrp1p often co-localizes with actin in cortical patches. However, disassembly of the actin cytoskeleton using Latrunculin-A does not alter verprolin's location, indicating that verprolin establishes and maintains its location independent of the actin cytoskeleton. Verprolin is a new member of the actin-binding protein family that serves as a polarity development protein, perhaps by anchoring actin. We speculate that the effects of verprolin upon the actin cytoskeleton might influence mitochondrial protein sorting/function via mRNA distribution.