Formin homology (FH) proteins are implicated in cell polarization and cytokinesis through actin organization. There are two FH proteins in the yeast Saccharomyces cerevisiae, Bni1p and Bnr1p. Bni1p physically interacts with Rho family small G proteins (Rho1p and Cdc42p), actin, two actin-binding proteins (profilin and Bud6p), and a polarity protein (Spa2p). Here we analyzed the in vivo localization of Bni1p by using a time-lapse imaging system and investigated the regulatory mechanisms of Bni1p localization and function in relation to these interacting proteins. Bni1p fused with green fluorescent protein localized to the sites of cell growth throughout the cell cycle. In a small-budded cell, Bni1p moved along the bud cortex. This dynamic localization of Bni1p coincided with the apparent site of bud growth. A bni1-disrupted cell showed a defect in directed growth to the pre-bud site and to the bud tip (apical growth), causing its abnormally spherical cell shape and thick bud neck. Bni1p localization at the bud tips was absolutely dependent on Cdc42p, largely dependent on Spa2p and actin filaments, and partly dependent on Bud6p, but scarcely dependent on polarized cortical actin patches or Rho1p. These results indicate that Bni1p regulates polarized growth within the bud through its unique and dynamic pattern of localization, dependent on multiple factors, including Cdc42p, Spa2p, Bud6p, and the actin cytoskeleton.