Cell morphogenesis is a complex process that relies on a diverse array of proteins and pathways. We have identified a transglutaminase-like protein (Cyk3p) that functions in fission yeast morphogenesis. The phenotype of a cyk3 knockout strain indicates a primary role for Cyk3p in cytokinesis. Correspondingly, Cyk3p localizes both to the actomyosin contractile ring and the division septum, promoting ring constriction, septation, and subsequent cell separation following ring disassembly. In addition, Cyk3p localizes to polarized growth sites and plays a role in cell shape determination, and it also appears to contribute to cell integrity during stationary phase, given its accumulation as dynamic puncta at the cortex of such cells. Our results and the conservation of Cyk3p across fungi point to a role in cell wall synthesis and remodeling. Cyk3p possesses a transglutaminase domain that is essential for function, even though it lacks the catalytic active site. In a wider sense, our work illustrates the physiological importance of inactive members of the transglutaminase family, which are found throughout eukaryotes. We suggest that the proposed evolution of animal transglutaminase cross-linking activity from ancestral bacterial thiol proteases was accompanied by the emergence of a subclass whose function does not depend on enzymatic activity.