We have biochemically identified the Saccharomyces cerevisiae homologue of the mammalian actin binding protein cofilin. Cofilin and related proteins isolated from diverse organisms are low molecular weight proteins (15-20 kD) that possess several activities in vitro. All bind to monomeric actin and sever filaments, and some can stably associate with filaments. In this study, we demonstrate using viscosity, sedimentation, and actin assembly rate assays that yeast cofilin (16 kD) possesses all of these properties. Cloning and sequencing of the S. cerevisiae cofilin gene (COF1) revealed that yeast cofilin is 41% identical in amino acid sequence to mammalian cofilin and, surprisingly, has homology to a protein outside the family of cofilin-like proteins. The NH2-terminal 16kD of Abp1p, a 65-kD yeast protein identified by its ability to bind to actin filaments, is 23% identical to yeast cofilin. Immunofluorescence experiments showed that, like Abp1p, cofilin is associated with the membrane actin cytoskeleton. A complete disruption of the COF1 gene was created in diploid cells. Sporulation and tetrad analysis revealed that yeast cofilin has an essential function in vivo. Although Abp1p shares sequence similarity with cofilin and has the same distribution as cofilin in the cell, multiple copies of the ABP1 gene cannot compensate for the loss of cofilin. Thus, cofilin and Abp1p are structurally related but functionally distinct components of the yeast membrane cytoskeleton.