Neuronal activity regulates the formation and morphology of dendritic spines through changes in the actin cytoskeleton. However, the molecular mechanisms that regulate this process remain poorly understood. Here we report that Eps8, an actin-capping protein, is required for spine morphogenesis. In rat hippocampal neurons, gain- and loss-of-function studies demonstrate that Eps8 promotes the formation of dendritic spines but inhibits filopodium formation. Loss of function of Eps8 increases actin polymerization and induces fast actin turnover within dendritic spines, as revealed by free-barbed end and FRAP assays, consistent with a role for Eps8 as an actin-capping protein. Interestingly, Eps8 regulates the balance between excitatory synapses on spines and on the dendritic shaft, without affecting the total number of synapses or basal synaptic transmission. Importantly, Eps8 loss of function impairs the structural and functional plasticity of synapses induced by long-term potentiation. These findings demonstrate a novel role for Eps8 in spine formation and in activity-mediated synaptic plasticity.