Maintaining tissue integrity during epidermal morphogenesis depends on α-catenin, which connects the cadherin complex to F-actin. We show that the adhesion modulation domain (AMD) of Caenorhabditis elegans HMP-1/α-catenin regulates its F-actin-binding activity and organization of junctional-proximal actin in vivo. Deleting the AMD increases F-actin binding in vitro and leads to excess actin recruitment to adherens junctions in vivo. Reducing actin binding through a compensatory mutation in the C-terminus leads to improved function. Based on the effects of phosphomimetic and nonphosphorylatable mutations, phosphorylation of S509, within the AMD, may regulate F-actin binding. Taken together, these data establish a novel role for the AMD in regulating the actin-binding ability of an α-catenin and its proper function during epithelial morphogenesis.