Cell division in fungal cells requires the coordination of three different processes: determination of the site of division, actomyosin ring formation, and the concomitant contraction of this ring together with chitin deposition at septal sites. This report describes the isolation of the AgBUD3 homologue and the characterization of Bud3 protein function in Ashbya gossypii. Bud3 fused to green fluorescent protein was shown to localize transiently either as a single ring to multiple sites of future septation or as a double ring to newly established septa. Deletion of AgBUD3 leads to a striking change in actin ring localization involving the mislocalization of AgCyk1, which is required for actin ring assembly. Aberrant chitin accumulation occurs subsequently, generating delocalized septa. Thus, in A. gossypii, Bud3 acts as a landmark, tagging future septal sites, and is involved in the positioning of the contractile ring, whereas it does not direct lateral branching.