Villin is a major actin-bundling protein in the brush border of epithelial cells. In this study we demonstrate for the first time that villin can bundle actin filaments using a single F-actin binding site, because it has the ability to self-associate. Using fluorescence resonance energy transfer, we demonstrate villin self-association in living cells in microvilli and in growth factor-stimulated cells in membrane ruffles and lamellipodia. Using sucrose density gradient, size-exclusion chromatography, and matrix-assisted laser desorption ionization time-of-flight, the majority of villin was identified as a monomer or dimer. Villin dimers were also identified in Caco-2 cells, which endogenously express villin and Madin-Darby canine kidney cells that ectopically express villin. Using truncation mutants of villin, site-directed mutagenesis, and fluorescence resonance energy transfer, an amino-terminal dimerization site was identified that regulated villin self-association in parallel conformation as well as actin bundling by villin. This detailed analysis describes for the first time microvillus assembly by villin, redefines the actin-bundling function of villin, and provides a molecular mechanism for actin bundling by villin, which could have wider implications for other actin cross-linking proteins that share a villin-like headpiece domain. Our study also provides a molecular basis to separate the morphologically distinct actin-severing and actin-bundling properties of villin.