CLP36 is a member of the PDZ-LIM family of proteins, which associates with alpha-actinin and localizes to the actin cytoskeleton. CLP36 is involved in the formation of stress fibers and focal adhesions; however, the molecular mechanism of how CLP36 regulates stress fiber formation is still unknown. To investigate the physiological function of CLP36, we performed yeast two-hybrid screening, and found that CLP36 interacts with palladin. Palladin is an important structural element of the actin cytoskeleton that is ubiquitously expressed and associates with alpha-actinin. The interaction was dependent on the PDZ domain of CLP36 and the C-terminus of palladin, and silencing of palladin suppressed localization of CLP36 to stress fibers. Overexpression of the PDZ domain of CLP36 also inhibited the localization of palladin to stress fibers, suggesting that the association of CLP36 and palladin is important for the localization of both proteins to stress fibers. Our experimental results indicate that alpha-actinin, CLP36 and palladin form a protein complex and contribute to regulation of the actin cytoskeleton.