The evolutionarily conserved Mdm20 protein (Mdm20p) plays an important role in tropomyosin–F-actin interactions that generate actin filaments and cables in budding yeast. However, Mdm20p is not a structural component of actin filaments or cables, and its exact function in cable stability has remained a mystery. Here, we show that cells lacking Mdm20p fail to N-terminally acetylate Tpm1p, an abundant form of tropomyosin that binds and stabilizes actin filaments and cables. The F-actin-binding activity of unacetylated Tpm1p is reduced severely relative to the acetylated form. These results are complemented by the recent report that Mdm20p copurifies with one of three acetyltransferases in yeast, the NatB complex. We present genetic evidence that Mdm20p functions cooperatively with Nat3p, the catalytic subunit of the NatB acetyltransferase. These combined results strongly suggest that Mdm20p-dependent, N-terminal acetylation of Tpm1p by the NatB complex is required for Tpm1p association with, and stabilization of, actin filaments and cables.