Palladin is a recently discovered actin-associated protein that appears to be involved in both normal cell migration and invasive cell motility. Recently, we demonstrated that palladin is able to both bind and bundle actin filaments directly and revealed that one of the immunoglobulin-like domains of palladin (Ig3) is a novel actin-binding domain. These results indicate that palladin occupies an unusual functional niche, as it possesses the properties of both an actin-crosslinking protein and a molecular scaffold that binds to multiple other actin-regulating proteins. In the work presented here, we determined the NMR solution structure of palladin’s Ig3 domain and identified two basic patches that are critical for actin-binding and bundling. The results we have obtained provide insight into the manner in which palladin binds and crosslinks actin filaments and suggest the importance of electrostatics in this interaction. Electrostatics are also a major determinant in actin polymerization, therefore we further present preliminary kinetic data that indicates palladin may also be capable of inducing actin polymerization. In addition, we examined whether the Ig3 domain of palladin is required for actin organization in a cellular context. In cells transfected with a full-length palladin construct containing a deletion of the actin-binding domain we observe dramatically altered cellular distribution of both palladin and actin, which suggests that this interaction is critical. These findings are critical for understanding the mechanism that palladin utilizes in promoting cell motility by identifying residues within the palladin Ig3 domain that are important for actin binding and bundling, but also points to a mechanism for actin filament crosslinking.