Formins are conserved actin nucleators which promote the assembly of actin filaments for the formation of diverse actin structures. In fission yeast Schizosaccharomyces pombe, the formin cdc12p is required specifically in assembly of the actin-based contractile ring during cytokinesis. Here, using a mutational analysis of cdc12p, we identify regions of cdc12p responsible for ring assembly and localization. Profilin-binding residues of the FH1 domain regulate actin assembly and processive barbed-end capping by the FH2 domain. Studies using photobleaching (FRAP) and sensitivity to latrunculin A treatment show that profilin binding modulates the rapid dynamics of actin and cdc12p within the ring in vivo. Visualized by functional GFP-fusion constructs expressed from the endogenous promoter, cdc12p appears in a small number of cytoplasmic motile spot structures that deliver the formin to the ring assembly site, without detectable formation of an intermediate band of "nodes." The FH3/DID region directs interphase spot localization, while an N-terminal region and the FH1-FH2 domains of cdc12p can target its localization to the ring. Mutations in putative DID and DAD regions do not alter regulation, suggesting that cdc12p is not regulated by a canonical autoinhibition mechanism. Our findings provide insights into the regulation of formin activity and the mechanisms of contractile ring dynamics and assembly.