Down-regulation of several key actin-binding proteins, such as ␣-actinin, vinculin, gelsolin, and tropomyosins (TMs), is considered to contribute to the disorganized cytoskeleton present in many neoplastic cells. TMs stabilize actin filaments against the gel severing actions of proteins such as cofilin. Among multiple TMs expressed in non-muscle cells, tropomyosin-1 (TM1) isoform induces stress fibers and functions as a suppressor of malignant transformation. However, the molecular mechanisms of TM1-mediated cytoskeletal effects and tumor suppression remain poorly understood. We have hypothesized that the ability of TM1 to stabilize microfilaments is crucial for tumor suppression. In this study, by employing a variant TM1, which contains an N-terminal hemagglutinin epitope tag, we demonstrate that the N terminus is a key determinant of tropomyosin-1 function. Unlike the wild type TM1, the modified protein fails to restore stress fibers and inhibit anchorage-independent growth in transformed cells. Furthermore, the N-terminal modification of TM1 disorganizes the cytoskeleton and delays cytokinesis in normal cells, abolishes binding to F-actin, and disrupts the dimeric associations in vivo. The functionally defective TM1 allows the association of cofilin to stress fibers and disorganizes the microfilaments, whereas wild type TM1 appears to restrict the binding of cofilin to stress fibers. TM1-induced cytoskeletal reorganization appears to be mediated through preventing cofilin interaction with microfilaments. Our studies provide in vivo functional evidence that the N terminus is a critical determinant of TM1 functions, which in turn determines the organization of stress fibers.