Regulation of microtubule dynamics and organization in mitosis by a number of microtubule-associated proteins (MAPs) is required for proper bipolar spindle assembly, yet the precise mechanisms by which many MAPs function are poorly understood. One interesting class of MAPs is known to localize to the nucleus during interphase yet fulfill important spindle functions during mitosis. We have identified Xenopus nuclear factor 7 (Xnf7), a developmental regulator of dorsal-ventral patterning, as a microtubule-binding protein that also associates with the nuclear import receptor importin alpha/beta. Xnf7 localized to interphase nuclei and metaphase spindles both in Xenopus egg extracts and cultured cells. Xnf7-depleted spindles were hypersensitive to microtubule-depolymerizing agents. Functional characterization of Xnf7 revealed that it binds directly to microtubules, exhibits RING-finger-dependent E3-ubiquitin-ligase activity, and has C-terminal-dependent microtubule-bundling activity. The minimal microtubule-bundling domain of Xnf7 was sufficient to rescue the spindle-hypersensitivity phenotype. Thus, we have identified Xnf7 as a nuclear MAP whose microtubule-bundling activity, but not E3-ligase activity, contributes to microtubule organization and spindle integrity. Characterization of the multiple activities of Xnf7 may have implications for understanding human diseases caused by mutations in related proteins.