The ESCRT-III complex induces outward membrane budding and fission through homotypic polymerization of its core component Shrub/CHMP4B. Shrub activity is regulated by its direct interaction with a protein called Lgd in flies, or CC2D1A or B in humans. Here, we report the structural basis for this interaction and propose a mechanism for regulation of polymer assembly. The isolated third DM14 repeat of Lgd binds Shrub, and an Lgd fragment containing only this DM14 repeat and its C-terminal C2 domain is sufficient for in vivo function. The DM14 domain forms a helical hairpin with a conserved, positively charged tip, that, in the structure of a DM14 domain-Shrub complex, occupies a negatively charged surface of Shrub that is otherwise used for homopolymerization. Lgd mutations at this interface disrupt its function in flies, confirming functional importance. Together, these data argue that Lgd regulates ESCRT activity by controlling access to the Shrub self-assembly surface.