Formins perform essential roles in actin assembly and organization in vivo, but they also require tight regulation of their activities to produce properly functioning actin structures. Saccharomyces cerevisiae Bud14 is one member of an emerging class of formin regulators that target the FH2 domain to inhibit actin polymerization, but little is known about how these regulators are themselves controlled in vivo. Kelch proteins are critical for cell polarity and morphogenesis in a wide range of organisms, but their mechanistic roles in these processes are still largely undefined. Here, we report that S. cerevisiae Kelch proteins, Kel1 and Kel2, associate with Bud14 in cell extracts to form a stable 520-kDa complex with an apparent stoichiometry of 2:2:1 Bud14/Kel1/Kel2. Using pairwise combinations of GFP- and red fluorescent protein-tagged proteins, we show that Kel1, Kel2, and Bud14 interdependently co-localize at polarity sites. By analyzing single, double, and triple mutants, we show that Kel1 and Kel2 function in the same pathway as Bud14 in regulating Bnr1-mediated actin cable formation. Loss of any component of the complex results in long, bent, and hyper-stable actin cables, accompanied by defects in secretory vesicle traffic during polarized growth and septum formation during cytokinesis. These observations directly link S. cerevisiae Kelch proteins to the control of formin activity, and together with previous observations made for S. pombe homologues tea1p and tea3p, they have broad implications for understanding Kelch function in other systems. 