Fragmin from Physarum polycephalum is a gelsolin-like actin-binding protein and interferes with the growth of actin filaments in vitro by severing actin filaments and capping their barbed ends through formation of an actin-fragmin dimer in a Ca2+-dependent manner. The actin-fragmin dimer is phosphorylated in vivo and in vitro on the actin subunit by the actin-fragmin kinase. We have studied the properties of these capping proteins and their regulation by actin phosphorylation and Ca2+ ions in living PtK2, CV1 and NIH3T3 cultured cells by microinjection or by expression in conjunction with immunostaining and fluorescence microscopy. Microinjection of the actin-fragmin dimer disintegrated the actin cytoskeleton and altered cell morphology. This in vivo effect could be blocked by phosphorylation of the actin subunit by the actin-fragmin kinase in low Ca2+ conditions, and the capping activity could be recovered by high Ca2+ concentration, probably through activation of the second actin-binding site in fragmin. This suggests that in Physarum microplasmodia, actin polymerization can be controlled in a Ca2+-dependent manner through the phosphorylation of actin. Microinjected or overexpressed recombinant fragmin did not affect the actin-based cytoskeleton or cell morphology of resting cells, unless the cytosolic free Ca2+ concentration was increased by microinjection of a Ca2+-containing buffer. The cells were able to revert to their normal phenotype which indicates that endogenous regulatory mechanisms counteracted fragmin activity, probably by uncapping fragmin from the barbed ends of filaments. Fragmin also antagonized formation of stress fibers induced by lysophosphatidic acid. Our findings demonstrate that the interactions between actin and fragmin are tightly regulated by the cytosolic Ca2+ concentration and this provides a basis for a more general mechanism in higher organisms to regulate microfilament organization.