Formins are a conserved family of actin assembly-promoting factors with diverse biological roles, but how their activities are regulated in vivo is not well understood. In Saccharomyces cerevisiae, the formins Bni1 and Bnr1 are required for the assembly of actin cables and polarized cell growth. Proper cable assembly further requires Bud6. Previously it was shown that Bud6 enhances Bni1-mediated actin assembly in vitro, but the biochemical mechanism and in vivo role of this activity were left unclear. Here we demonstrate that Bud6 specifically stimulates the nucleation rather than the elongation phase of Bni1-mediated actin assembly, defining Bud6 as a nucleation-promoting factor (NPF) and distinguishing its effects from those of profilin. We generated alleles of Bud6 that uncouple its interactions with Bni1 and G-actin and found that both interactions are critical for NPF activity. Our data indicate that Bud6 promotes filament nucleation by recruiting actin monomers to Bni1. Genetic analysis of the same alleles showed that Bud6 regulation of formin activity is critical for normal levels of actin cable assembly in vivo. Our results raise important mechanistic parallels between Bud6 and WASP, as well as between Bud6 and other NPFs that interact with formins such as Spire.