Cytokinesis separates cells by contraction of a ring composed of filamentous actin (F-actin) and type II myosin. Iqg1, an IQGAP family member, is an essential protein in Saccharomyces cerevisiae required for assembly and contraction of the actomyosin ring. Localization of F-actin to the ring occurs only after anaphase and is mediated by the calponin homology domain (CHD) of Iqg1, but the regulatory mechanisms that temporally restrict actin ring assembly are not well defined. We tested the hypothesis that dephosphorylation of four perfect cyclin-dependent kinase (Cdk) sites flanking the CHD promotes actin ring formation, using site-specific alanine mutants. Cells expressing the nonphosphorylatable iqg1-4A allele formed actin rings before anaphase and exhibited defects in myosin contraction and cytokinesis. The Cdc14 phosphatase is required for normal cytokinesis and acts on specific Cdk phosphorylation sites. Overexpression of Cdc14 resulted in premature actin ring assembly, whereas inhibition of Cdc14 function prevented actin ring formation. Cdc14 associated with Iqg1, dependent on several CHD-flanking Cdk sites, and efficiently dephosphorylated these sites in vitro. Of importance, the iqg1-4A mutant rescued the inability of cdc14-1 cells to form actin rings. Our data support a model in which dephosphorylation of Cdk sites around the Iqg1 CHD by Cdc14 is both necessary and sufficient to promote actin ring formation. Temporal control of actin ring assembly by Cdk and Cdc14 may help to ensure that cytokinesis onset occurs after nuclear division is complete.