Through analysis of a chemotaxis mutant obtained from a genetic screen in Dictyostelium discoideum, we have identified a new gene involved in regulating cell migration and have named it costars (cosA). The 82 amino acid Costars protein sequence appears highly conserved among diverse species, and significantly resembles the C-terminal region of the striated muscle activator of Rho signaling (STARS), a mammalian protein that regulates the serum response factor transcriptional activity through actin binding and Rho GTPase activation. The cosA-null (cosA(-)) cells formed smooth plaques on bacterial lawns, produced abnormally small fruiting bodies when developed on the non-nutrient agar and displayed reduced migration towards the cAMP source in chemotactic assays. Analysis of cell motion in cAMP gradients revealed decreased speed but wild-type-like directional persistence of cosA(-) cells, suggesting a defect in the cellular machinery for motility rather than for chemotactic orientation. Consistent with this notion, cosA(-) cells exhibited changes in the actin cytoskeleton, showing aberrant distribution of F-actin in fluorescence cell staining and an increased amount of cytoskeleton-associated actin. Excessive pseudopod formation was also noted in cosA(-) cells facing chemoattractant gradients. Expressing cosA or its human counterpart mCostars eliminated abnormalities of cosA(-) cells. Together, our results highlight a role for Costars in modulating actin dynamics and cell motility.