Mechanisms for activating the actin-related protein 2/3 (Arp2/3) complex have been the focus of many recent studies. Here, we identify a novel mode of Arp2/3 complex regulation mediated by the highly conserved actin binding protein coronin. Yeast coronin (Crn1) physically associates with the Arp2/3 complex and inhibits WA- and Abp1-activated actin nucleation in vitro. The inhibition occurs specifically in the absence of preformed actin filaments, suggesting that Crn1 may restrict Arp2/3 complex activity to the sides of filaments. The inhibitory activity of Crn1 resides in its coiled coil domain. Localization of Crn1 to actin patches in vivo and association of Crn1 with the Arp2/3 complex also require its coiled coil domain. Genetic studies provide in vivo evidence for these interactions and activities. Overexpression of CRN1 causes growth arrest and redistribution of Arp2 and Crn1p into aberrant actin loops. These defects are suppressed by deletion of the Crn1 coiled coil domain and by arc35-26, an allele of the p35 subunit of the Arp2/3 complex. Further in vivo evidence that coronin regulates the Arp2/3 complex comes from the observation that crn1 and arp2 mutants display an allele-specific synthetic interaction. This work identifies a new form of regulation of the Arp2/3 complex and an important cellular function for coronin.