Remodeling of actin filament arrays in response to biotic and abiotic stimuli is thought to require precise control over the generation and availability of filament ends. Heterodimeric capping protein (CP) is an abundant filament capper, and its activity is inhibited by membrane signaling phospholipids in vitro. How exactly CP modulates the properties of filament ends in cells and whether its activity is coordinated by phospholipids in vivo is not well understood. By observing directly the dynamic behavior of individual filament ends in the cortical array of living Arabidopsis thaliana epidermal cells, we dissected the contribution of CP to actin organization and dynamics in response to the signaling phospholipid, phosphatidic acid (PA). Here, we examined three cp knockdown mutants and found that reduced CP levels resulted in more dynamic activity at filament ends, and this significantly enhanced filament-filament annealing and filament elongation from free ends. The cp mutants also exhibited more dense actin filament arrays. Treatment of wild-type cells with exogenous PA phenocopied the actin-based defects in cp mutants, with an increase in the density of filament arrays and enhanced annealing frequency. These cytoskeletal responses to exogenous PA were completely abrogated in cp mutants. Our data provide compelling genetic evidence that the end-capping activity of CP is inhibited by membrane signaling lipids in eukaryotic cells. Specifically, CP acts as a PA biosensor and key transducer of fluxes in membrane signaling phospholipids into changes in actin cytoskeleton dynamics.