Myotilin is a sarcomeric Z-disc protein that binds F-actin directly and bundles actin filaments, although it does not contain a conventional actin-binding domain. Expression of mutant myotilin leads to sarcomeric alterations in the dominantly inherited limb-girdle muscular dystrophy 1A and in myofibrillar myopathy/desmin-related myopathy. Together, with previous in vitro studies, this indicates that myotilin has an important function in the assembly and maintenance of Z-discs. This study characterises further the interaction between myotilin and actin. Functionally important regions in myotilin were identified by actin pull-down and yeast two-hybrid assays and with a novel strategy that combines in vitro DNA transposition-based peptide insertion mutagenesis with phenotype analysis in yeast cells. The shortest fragment to bind actin was the second Ig domain together with a short C-terminal sequence. Concerted action of the first and second Ig domain was, however, necessary for the functional activity of myotilin, as verified by analysis of transposon mutants, actin binding and phenotypic effect in mammalian cells. Furthermore, the Ig domains flanked with N- and C-terminal regions were needed for actin-bundling, indicating that the mere actin-binding sequence was insufficient for the actin-regulating activity. None of the four known disease-associated mutations altered the actin-organising ability. These results, together with previous studies in titin and kettin, identify the Ig domain as an actin-binding unit.