Working in concert, multiple actin-binding proteins regulate the dynamic turnover of actin networks. Here, we define a novel function for the conserved actin-binding protein twinfilin, which until now was thought to function primarily as a monomer-sequestering protein. We show that purified budding yeast twinfilin (Twf1) binds to and severs actin filaments in vitro at pH below 6.0 in bulk kinetic and fluorescence microscopy assays. Further, we use total internal reflection fluorescence (TIRF) microscopy to demonstrate that Twf1 severs individual actin filaments in real time. It has been shown that capping protein directly binds to Twf1 and is required for Twf1 localization to cortical actin patches in vivo. We demonstrate that capping protein directly inhibits the severing activity of Twf1, the first biochemical function ascribed to this interaction. In addition, phosphatidylinositol (4,5)-bisphosphate [PtdIns(4,5)P2] inhibits Twf1 filament-severing activity. Consistent with these biochemical activities, a twf1Delta mutation causes reduced rates of cortical actin patch turnover in living cells. Together, our data suggest that twinfilin coordinates filament severing and monomer sequestering at sites of rapid actin turnover and is controlled by multiple regulatory inputs.