Phosphorylation of myristoylated alanine-rich protein kinase C substrate (MARCKS) by protein kinase C eliminates actin filament cross-linking activity, but residual filament binding activity docks phosphorylated MARCKS on filamentous actin. The postulated actin-binding region of MARCKS, which includes a Ca(2+)-calmodulin-binding site, has been portrayed with alpha-helical structure, analogous to other calmodulin-binding domains. Previous speculation suggested that MARCKS may dimerize to form the two functional actin-binding sites requisite for cross-linking activity. Contrary to these hypotheses, we show that MARCKS peptide with actin-cross-linking activity has an extended structure in aqueous solution but assumes a more compact structure upon phosphorylation. We hypothesize that structural changes in the MARCKS peptide induced by phosphorylation create a dynamic structure that, on average, has only one actin-binding site. Moreover, independent of the state of phosphorylation, this peptide is monomeric rather than dimeric, implying that two distinct actin-binding sites are responsible for the actin-cross-linking activity of unphosphorylated MARCKS. These studies uniquely elucidate the mechanism by which phosphorylation of MARCKS induces structural changes and suggest how these structural changes determine biological activity.