Local actin assembly is associated with sites of exocytosis in processes ranging from phagocytosis to compensatory endocytosis. Here, we examine whether the trigger for actin-coat assembly around exocytosing Xenopus egg cortical granules is 'compartment mixing'--the union of the contents of the plasma membrane with that of the secretory granule membrane. Consistent with this model, compartment mixing occurs on cortical granule-plasma membrane fusion and is required for actin assembly. Compartment mixing triggers actin assembly, at least in part, through diacylglycerol (DAG), which incorporates into the cortical granule membranes from the plasma membrane after cortical granule-plasma membrane fusion. DAG, in turn, directs long-term recruitment of protein kinase Cbeta (PKCbeta) to exocytosing cortical granules, where it is required for activation of Cdc42 localized on the cortical granules. The results demonstrate that mixing of two membrane compartments can direct local actin assembly and indicate that this process is harnessed during Xenopus egg cortical granule exocytosis to drive compensatory endocytosis.