Zonula occludens (ZO)‐1 is a member of the MAGUK (membrane‐associated guanylate kinase homologs) family of membrane‐associated signaling molecules that binds directly to both cytosolic and transmembrane components of the tight junction and is believed to organize these proteins within the apical junctional complex. It also binds directly to F‐actin, although the functional relevance of this interaction is unknown. To address this issue, we have used VSVG‐ tagged transgenes to dissect ZO‐1 and have identified a 220 amino acid region of ZO‐1 that is necessary for its association with F‐actin in MDCK cell pull‐down assays. A GST fusion expressing this region can bind directly to F‐actin in vitro, whereas a GFP fusion expressing this domain decorates actin stress fibers when expressed in MDCK cells. These results indicate that this actin‐binding region (ABR) is both necessary and sufficient for binding to F‐actin in vitro and in vivo. VSVG‐tagged transgenes that lack the ABR still accumulate at both early and late cell‐cell contacts in MDCK cells, suggesting that the ABR is not required for tight junction localization. However, accumulation of constructs lacking the ABR is markedly reduced at tight junctions in confluent cells, suggesting that the ABR does play an important role in the localization of ZO‐1 at junctions. Furthermore, the ABR is required for localization to a novel actin‐rich pool of ZO‐1 that accumulates in puncta at the free edge of cells before initiation of cell‐cell contact. We conclude that direct interactions between ZO‐1 and F‐actin play a role in several different steps of junction assembly.