Formins are conserved actin nucleators responsible for the assembly of diverse actin structures. Many formins are controlled through an autoinhibitory mechanism involving the interaction of a C-terminal DAD sequence with an N-terminal DID sequence. Here, we show that the fission yeast formin for3p, which mediates actin cable assembly and polarized cell growth, is regulated by a similar autoinhibitory mechanism in vivo. Multiple sites govern for3p localization to cell tips. The localization and activity of for3p are inhibited by an intramolecular interaction of divergent DAD and DID-like sequences. A for3p DAD mutant expressed at endogenous levels produces more robust actin cables, which appear to have normal organization and dynamics. We identify cdc42p as the primary Rho GTPase involved in actin cable assembly and for3p regulation. Both cdc42p, which binds at the N terminus of for3p, and bud6p, which binds near the C-terminal DAD-like sequence, are needed for for3p localization and full activity, but a mutation in the for3p DAD restores for3p localization and other phenotypes of cdc42 and bud6 mutants. In particular, the for3p DAD mutation suppresses the bipolar growth (NETO) defect of bud6Delta cells. These findings suggest that cdc42p and bud6p activate for3p by relieving autoinhibition.