From fruit fly to human, muscle cells form through conserved steps. During the formation of muscle, actin cytoskeleton plays critical roles in muscle cell fusion, attachment and the assembly of muscle structures. Disruption of the arrangement of actin severely impairs muscle function and results in muscle disease. To better understand key steps of muscle development and how actin form different structures to regulate muscle formation and maturation, we used Drosophila melanogaster as a model system to study two steps of muscle development: myoblast fusion and sarcomere assembly. The multinucleated muscles form through myoblast fusion. During fusion, actin filaments accumulate at the site of fusion to form a focus structure and mediate fusion. The formation of actin focus is regulated by Arp2/3—an actin regulator that polymerizes branched actin network. In my thesis, I have identified two additional factors, the phospholipid PI(4,5)P2 and the formin Diaphanous (Dia), as required for myoblast fusion. During fusion, both PI(4,5)P2 and Dia accumulate at the fusion site. PI(4,5)P2 control the localization and activation of SCAR and WASp, which activate Arp2/3 and trigger the formation of branched actin. Dia, which builds linear actin filaments, plays two roles during actin focus formation: it dictates the level of linear F-actin polymerization, and it is required for appropriate branched actin polymerization via localization of SCAR and WASp. Actin cytoskeleton is also a major component of sarcomere--the muscle contractile machinery. I found Dia plays a critical role for sarcomere growth in the indirect flight muscles of adult fruit fly. The localization of Dia in the sarcomere is mediated by PI(4,5)P2. Dia genetically interacts with the Gelsolin superfamily member Flightless I (FliI) to regulate thin filament length and sarcomere size, possibly through maintaining the G-actin pool and regulating actin dynamics of the thin filaments. Together, my thesis work identified new factors that regulate muscle formation, enhanced our understanding of how the actin dynamics are regulated during different stage of muscle development.