SCD5 was identified as a multicopy suppressor of clathrin HC-deficient yeast. SCD5 is essential, but an scd5-Delta338 mutant, expressing Scd5p with a C-terminal truncation of 338 amino acids, is temperature sensitive for growth. Further studies here demonstrate that scd5-Delta338 affects receptor-mediated and fluid-phase endocytosis and normal actin organization. The scd5-Delta338 mutant contains larger and depolarized cortical actin patches and a prevalence of G-actin bars. scd5-Delta338 also displays synthetic negative genetic interactions with mutations in several other proteins important for cortical actin organization and endocytosis. Moreover, Scd5p colocalizes with cortical actin. Analysis has revealed that clathrin-deficient yeast also have a major defect in cortical actin organization and accumulate G-actin. Overexpression of SCD5 partially suppresses the actin defect of clathrin mutants, whereas combining scd5-Delta338 with a clathrin mutation exacerbates the actin and endocytic phenotypes. Both Scd5p and yeast clathrin physically associate with Sla2p, a homologue of the mammalian huntingtin interacting protein HIP1 and the related HIP1R. Furthermore, Sla2p localization at the cell cortex is dependent on Scd5p and clathrin function. Therefore, Scd5p and clathrin are important for actin organization and endocytosis, and Sla2p may provide a critical link between clathrin and the actin cytoskeleton in yeast, similar to HIP1(R) in animal cells.