Annexin 2 is a ubiquitous Ca(2+)-binding protein that is essential for actin-dependent vesicle transport. Here, we show that in spontaneously motile cells annexin 2 is concentrated in dynamic actin-rich protrusions, and that depletion of annexin 2 using siRNA leads to the accumulation of stress fibres and loss of protrusive and retractile activity. Cells co-expressing annexin 2-CFP and actin-YFP exhibit Ca(2+)-dependent fluorescense resonance energy transfer throughout the cytoplasm and in membrane ruffles and protrusions, suggesting that annexin 2 may directly interact with actin. This notion was supported by biochemical studies, in which we show that annexin 2 reduces the polymerisation rate of actin monomers in a dose-dependent manner. By measuring actin polymerisation rates in the presence of barbed-end and pointed-end cappers, we further demonstrate that annexin 2 specifically inhibits filament elongation at the barbed ends. These results show that annexin 2 has an essential role in maintaining the plasticity of the dynamic membrane-associated actin cytoskeleton, and that its activity in this context may be at least partly explained through direct interactions with polymerised and monomeric actin.