Actin requires the chaperonin containing TCP1 (CCT), a hexadecameric ATPase essential for cell viability in eukaryotes, to fold to its native state. Following binding of unfolded actin to CCT, the cavity of the chaperone closes and actin is folded and released in an ATP-dependent folding cycle. In yeast, CCT forms a ternary complex with the phosducin-like protein PLP2p to fold actin, and together they can return nascent or chemically denatured actin to its native state in a pure in vitro folding assay. The complexity of the CCT-actin system makes the study of the actin folding mechanism technically challenging. We have established a novel spectroscopic assay through selectively labeling the C terminus of yeast actin with acrylodan and observe significant changes in the acrylodan fluorescence emission spectrum as actin is chemically unfolded and then refolded by the chaperonin. The variation in the polarity of the environment surrounding the fluorescent probe during the unfolding/folding processes has allowed us to monitor actin as it folds on CCT. The rate of actin folding at a range of temperatures and ATP concentrations has been determined for both wild type CCT and a mutant CCT, CCT4anc2, defective in folding actin in vivo. Binding of the non-hydrolysable ATP analog adenosine 5'-(β,γ-imino)triphosphate to the ternary complex leads to 3-fold faster release of actin from CCT following addition of ATP, suggesting a two-step folding process with a conformational change occurring upon closure of the cavity and a subsequent final folding step involving packing of the C terminus to the native-like state.