Capping protein controls the addition of actin subunits to the barbed end of actin filaments and nucleates actin polymerization in vitro. Capping protein has been identified in all eukaryotic cells examined so far; it is a heterodimer with subunits of relative molecular masses 32,000-36,000 (alpha-subunit) and 28,000-32,000 (beta-subunit). In skeletal muscle, capping protein (CapZ) probably binds the barbed ends of actin filaments at the Z line. The in vivo role of this protein in non-muscle cells is not known. We report here the characterization of CAP2, the single gene encoding the beta-subunit of capping protein in Saccharomyces cerevisiae. Yeast cells in which the CAP2 gene was disrupted by an insertion or a deletion had an abnormal actin distribution, including the loss of actin cables. The mutant cells were round and large, with a heterogeneous size distribution, and, although viable, grew more slowly than congenic wild-type cells. Chitin, a cell wall component restricted to the mother-bud junction in wild-type budding yeast, was found on the entire mother cell surface in the mutants. The phenotype of CAP2 disruption resembled that of temperature-sensitive mutations in the yeast actin gene ACT1, indicating that capping protein regulates actin-filament distribution in vivo.