Membrane phosphoinositides control organization and dynamics of the actin cytoskeleton by regulating the activities of several key actin-binding proteins. Twinfilin is an evolutionarily conserved protein that contributes to cytoskeletal dynamics by interacting with actin monomers, filaments, and the heterodimeric capping protein. Twinfilin also binds phosphoinositides, which inhibit its interactions with actin, but the underlying mechanism has remained unknown. Here, we show that the high-affinity binding site of twinfilin for phosphoinositides is located at the C-terminal tail region, whereas the two actin-depolymerizing factor (ADF)/cofilin-like ADF homology domains of twinfilin bind phosphoinositides only with low affinity. Mutagenesis and biochemical experiments combined with atomistic molecular dynamics simulations reveal that the C-terminal tail of twinfilin interacts with membranes through a multivalent electrostatic interaction with a preference toward phosphatidylinositol 3,5-bisphosphate (PI(3,5)P2), PI(4,5)P2, and PI(3,4,5)P3. This initial interaction places the actin-binding ADF homology domains of twinfilin in close proximity to the membrane and subsequently promotes their association with the membrane, thus leading to inhibition of the actin interactions. In support of this model, a twinfilin mutant lacking the C-terminal tail inhibits actin filament assembly in a phosphoinositide-insensitive manner. Our mutagenesis data also reveal that the phosphoinositide- and capping protein- binding sites overlap in the C-terminal tail of twinfilin, suggesting that phosphoinositide binding additionally inhibits the interactions of twinfilin with the heterodimeric capping protein. The results demonstrate that the conserved C-terminal tail of twinfilin is a multifunctional binding motif, which is crucial for interaction with the heterodimeric capping protein and for tethering twinfilin to phosphoinositide-rich membranes.