ADF/cofilin is a key regulator for actin dynamics during cytokinesis. Its activity is suppressed by phosphorylation and reactivated by dephosphorylation. Little is known, however, about regulatory mechanisms of ADF/cofilin function during formation of contractile ring actin filaments. Using Xenopus cycling extracts, we found that ADF/cofilin was dephosphorylated at prophase and telophase. In addition, constitutively active Rho GTPase induced dephosphorylation of ADF/cofilin in the egg extracts. This dephosphorylation was inhibited by Na₃VO₄ but not by other conventional phosphatase-inhibitors. We cloned a Xenopus homologue of Slingshot phosphatase (XSSH), originally identified in Drosophila and human as an ADF/cofilin phosphatase, and raised antibody specific for the catalytic domain of XSSH. This inhibitory antibody significantly suppressed the Rho-induced dephosphorylation of ADF/cofilin in extracts, suggesting that the dephosphorylation at telophase is dependent on XSSH. XSSH bound to actin filaments with a dissociation constant of 0.4 μM, and the ADF/cofilin phosphatase activity was increased in the presence of F-actin. When latrunculin A, a G-actin-sequestering drug, was added to extracts, both Rho-induced actin polymerization and dephosphorylation of ADF/cofilin were markedly inhibited. Jasplakinolide, an actin-stabilizing drug, alone induced actin polymerization in the extracts and lead to dephosphorylation of ADF/cofilin. These results suggest that Rho-induced dephosphorylation of ADF/cofilin is dependent on the XSSH activation that is caused by increase in the amount of F-actin induced by Rho signaling. XSSH colocalized with both actin filaments and ADF/cofilin in the actin patches formed on the surface of the early cleavage furrow. Injection of inhibitory antibody blocked cleavage of blastomeres. Thus, XSSH may reorganize actin filaments through dephosphorylation and reactivation of ADF/cofilin at early stage of contractile ring formation.