Actobindin purified from Acanthamoeba castellanii inhibits the nucleation, but not the elongation, phase of actin polymerization. Previously, we had speculated that actobindin, which can simultaneously bind two actin monomers (Bubb, M.R., Lewis, M.S., and Korn, E.D. (1991) J. Biol. Chem. 266, 3820-3826), might preferentially interact with small oligomers and inhibit their ability to elongate (Lambooy, P.K., and Korn, E.D. (1988) J. Biol. Chem. 263, 12836-12843). In the accompanying paper (Bubb, M.R., Lewis, M.S., and Korn, E.D. (1994) J. Biol. Chem. 269, 25587-25591), we show that under non-polymerizing conditions, actobindin binds to covalently cross-linked actin dimers with higher affinity than to two actin monomers. The sedimentation velocity and fluorescence anisotropy experiments described in this paper show that actobindin prevents the formation of actin oligomers larger than an actin dimer under conditions in which, in the absence of actobindin, actin rapidly polymerizes to F-actin with no detectable small oligomers. Moreover, the molar concentration of actin dimer formed in the presence of actobindin can exceed the total actobindin concentration. These results indicate that actobindin does not form a stable complex with native actin dimer but, rather, causes the accumulation of dimers that are unable to nucleate polymerization or self-associate.