The budding yeast IQGAP-like protein Cyk1p/Iqg1p localizes to the mother-bud junction during anaphase and has been shown to be required for the completion of cytokinesis. In this study, video microscopy analysis of cells expressing green fluorescent protein-tagged Cyk1p/Iqg1p demonstrates that Cyk1p/Iqg1p is a dynamic component of the contractile ring during cytokinesis. Furthermore, in the absence of Cyk1p/Iqg1p, myosin II fails to undergo the contraction-like size change at the end of mitosis. To understand the mechanistic role of Cyk1p/Iqg1p in actomyosin ring assembly and dynamics, we have investigated the role of the structural domains that Cyk1p/Iqg1p shares with IQGAPs. An amino terminal portion containing the calponin homology domain binds to actin filaments and is required for the assembly of actin filaments to the ring. This result supports the hypothesis that Cyk1p/Iqg1p plays a direct role in F-actin recruitment. Deletion of the domain harboring the eight IQ motifs abolishes the localization of Cyk1p/Iqg1p to the bud neck, suggesting that Cyk1p/Iqg1p may be localized through interactions with a calmodulin-like protein. Interestingly, deletion of the COOH-terminal GTPase-activating protein-related domain does not affect Cyk1p/Iqg1p localization or actin recruitment to the ring but prevents actomyosin ring contraction. In vitro binding experiments show that Cyk1p/Iqg1p binds to calmodulin, Cmd1p, in a calcium-dependent manner, and to Tem1p, a small GTP-binding protein previously found to be required for the completion of anaphase. These results demonstrate the critical function of Cyk1p/Iqg1p in regulating various steps of actomyosin ring assembly and cytokinesis.