Proteins that constitute the endosomal sorting complex required for transport (ESCRT) are necessary for the sorting of proteins into multivesicular bodies (MVBs) and the budding of several enveloped viruses, including HIV-1. The first of these complexes, ESCRT-I, consists of three proteins: Vps28p, Vps37p, and Vps23p or Tsg101 in mammals. Here, we characterize a mutation in the Drosophila homolog of vps28. The dVps28 gene is essential: homozygous mutants die at the transition from the first to second instar. Removal of maternally contributed dVps28 causes early embryonic lethality. In such embryos lacking dVps28, several processes that require the actin cytoskeleton are perturbed, including axial migration of nuclei, formation of transient furrows during cortical divisions in syncytial embryos, and the subsequent cellularization. Defects in actin cytoskeleton organization also become apparent during sperm individualization in dVps28 mutant testis. Because dVps28 mutant cells contained MVBs, these defects are unlikely to be a secondary consequence of disrupted MVB formation and suggest an interaction between the actin cytoskeleton and endosomal membranes in Drosophila embryos earlier than previously appreciated.