Villin-type headpiece domains are ∼70 residue motifs that reside at the C-terminus of a variety of actin-associated proteins. Villin headpiece (HP67) is a commonly used model system for both experimental and computational studies of protein folding. HP67 is made up of two subdomains that form a tightly packed interface. The isolated C-terminal subdomain of HP67 (HP35) is one of the smallest autonomously folding proteins known. The N-terminal subdomain requires the presence of the C-terminal subdomain to fold. In the structure of HP67, a conserved salt bridge connects N- and C-terminal subdomains. This buried salt bridge between residues E39 and K70 is unusual in a small protein domain. We used mutational analysis, monitored by CD and NMR, and functional assays to determine the role of this buried salt bridge. First, the two residues in the salt bridge were replaced with strictly hydrophobic amino acids, E39M/K70M. Second, the two residues in the salt bridge were swapped, E39K/K70E. Any change from the wild-type salt bridge residues results in unfolding of the N-terminal subdomain, even when the mutations were made in a stabilized variant of HP67. The C-terminal subdomain remains folded in all mutants and is stabilized by some of the mutations. Using actin sedimentation assays, we find that a folded N-terminal domain is essential for specific actin binding. Therefore, the buried salt bridge is required for the specific folding of the N-terminal domain which confers actin-binding activity to villin-type headpiece domains, even though the residues required for this specific interaction destabilize the C-terminal subdomain.