Pan1p is a yeast actin cytoskeleton-associated protein localized in actin patches. It activates the Arp2/3 complex, which is necessary for actin polymerization and endocytosis. We isolated the pan1-11 yeast mutant unable to grow on oleate as a sole carbon source and, therefore, exhibiting the Oleate- phenotype. In addition, mutant cells are temperature-sensitive and grow more slowly on glycerol or succinate-containing medium but similarly to the wild type on ethanol, pyruvate or acetate-containing media; this indicates proper functioning of the mitochondrial respiratory chain. However, growth on ethanol medium is compromised when oleic acid is present. Cells show growth arrest in the apical growth phase, and accumulation of cells with abnormally elongated buds is observed. The growth defects of pan1-11 are suppressed by overexpression of the END3 gene encoding a protein that binds Pan1p. The morphology of peroxisomes and induction of peroxisomal enzymes are normal in pan1-11, indicating that the defect in growth on oleate medium does not result from impairment in peroxisome function. The pan1-11 allele has a deletion of a fragment encoding amino acids 1109-1126 that are part of (QPTQPV)7 repeats. Surprisingly, the independently isolated pan1-9 mutant, which expresses a truncated form of Pan1p comprising aa 1-859, is able to grow on all media tested. Our results indicate that Pan1p, and possibly other components of the actin cytoskeleton, are necessary to properly regulate growth of dividing cells in response to the presence of some alternative carbon sources in the medium.