Formin proteins modulate both nucleation and elongation of actin filaments through processive movement of their dimeric formin homology 2 (FH2) domains with filament barbed ends. Mammals possess at least 15 formin genes. A subset of formins termed "diaphanous formins" are regulated by autoinhibition through interaction between an N-terminal diaphanous inhibitory domain (DID) and a C-terminal diaphanous autoregulatory domain (DAD). Here, we found several striking features for the mouse formin, INF2. First, INF2 interacted directly with actin through a region C-terminal to the FH2. This second interacting region sequesters actin monomers, an activity that is dependent on a WASP homology 2 (WH2) motif. Second, the combination of the FH2 and C-terminal regions of INF2 resulted in its curious ability to accelerate both polymerization and depolymerization of actin filaments. The mechanism of the depolymerization activity, which is novel for formin proteins, involves both the monomer binding ability of the WH2 and a potent severing activity that is dependent on covalent attachment of the FH2 to the C terminus. Phosphate inhibits both the depolymerization and severing activities of INF2, suggesting that phosphate release from actin subunits in the filament is a trigger for depolymerization. Third, INF2 contains an N-terminal DID, and the WH2 motif likely doubles as a DAD in an autoinhibitory interaction.