Regulation of the actin cytoskeleton is crucial for cell morphology and migration. mDia is an actin nucleator that produces unbranched actin filaments downstream of Rho. However, the mechanisms by which mDia activity is regulated in the cell remain unknown. We pulled down Liprin-alpha as an mDia-binding protein. The binding is mediated through the central region of Liprin-alpha and through the N-terminal Dia-inhibitory domain (DID) and dimerization domain (DD) of mDia. Liprin-alpha competes with Dia autoregulatory domain (DAD) for binding to DID, and binds preferably to the open form of mDia. Overexpression of a Liprin-alpha fragment containing the mDia-binding region decreases localization of mDia to the plasma membrane and attenuates the Rho-mDia-mediated formation of stress fibers in cultured cells. Conversely, depletion of Liprin-alpha by RNA interference (RNAi) increases the amount of mDia in the membrane fraction and enhances formation of actin stress fibers. Thus, Liprin-alpha negatively regulates the activity of mDia in the cell by displacing it from the plasma membrane through binding to the DID-DD region.