Cortactin, a prominent substrate for pp60(c-src), is a filamentous actin (F-actin) binding protein. We show here that cortactin can promote sedimentation of F-actin at centrifugation forces under which F-actin is otherwise not able to be precipitated. Electron microscopic analysis after negative staining further revealed that actin filaments in the presence of cortactin are cross-linked into bundles of various degrees of thickness. Hence, cortactin is also an F-actin cross-linking protein. We also demonstrate that the optimal F-actin cross-linking activity of cortactin requires a physiological pH in a range of 7.3-7.5. Furthermore, pp60(c-src) phosphorylates cortactin in vitro, resulting in a dramatic reduction of its F-actin cross-linking activity in a manner depending on levels of tyrosine phosphorylation. In addition, pp60(c-src) moderately inhibits the F-actin binding activity of cortactin. This study presents the first evidence that pp60(c-src) can directly regulate the activity of its substrate toward the cytoskeleton and implies a role of cortactin as an F-actin modulator in tyrosine kinase-regulated cytoskeleton reorganization.