A fragment of the yeast formin Bni1 containing the FH1FH2 domains increases the rate of filament nucleation from pure G-actin [Pruyne et al. (2002) Science 297, 612-615]. To determine the mechanism of nucleation, we compared the G-actin dependence of Bni1FH1FH2-induced polymerization with theoretical models. The data best fit a model suggesting that Bni1FH1FH2 stabilizes an actin dimer. We also show that nucleation increases with the square root of the Bni1FH1FH2 concentration. We demonstrate that this relationship is expected for any such nucleator, independent of nucleus size. The proline-rich FH1 domain binds profilin, and deletion of this domain decreases the contribution of profilin-actin to the nucleation. A role for profilin binding to the FH1 domain in filament nucleation was supported by the inability of Bni1FH1FH2 to utilize a mutant profilin, H133S profilin, with defective binding to polyproline. Bni1FH1FH2 partially inhibits barbed-end elongation, and we find that the rate constants for both polymerization and depolymerization are decreased by approximately 50%. Bni1FH1FH2 has no effect on pointed-end kinetics or on the critical concentration. To investigate the domains of Bni1 required for these activities, the experiments were all duplicated with the FH2 domain alone. The FH2 domain is as effective as the FH1FH2 domains together in inhibiting barbed-end kinetics; it is less effective as a nucleator but the mechanism is again best fit by dimer stabilization.