Two related cellular proteins, p80 and p85 (cortactin), become phosphorylated on tyrosine in pp60src-transformed cells and in cells stimulated with certain growth factors. The amino-terminal half of cortactin is comprised of multiple copies of an internal, tandem 37-amino acid repeat. The carboxyl-terminal half contains a distal SH3 domain. We report that cortactin is an F-actin-binding protein. The binding to F-actin is specific and saturable. The amino-terminal repeat region appears to be both necessary and sufficient to mediate actin binding, whereas the SH3 domain had no apparent effect on the actin-binding activity. Cortactin, present in several different cell types, is enriched in cortical structures such as membrane ruffles and lamellipodia. The properties of cortactin indicate that it may be important for microfilament-membrane interactions as well as transducing signals from the cell surface to the cytoskeleton. We suggest the name cortactin, reflecting the cortical subcellular localization and its actin-binding activity.