How actin filaments are spatially organized and remodeled into diverse higher-order networks in vivo is still not well understood. Here, we report an unexpected F-actin "coalescence" activity driven by cyclase-associated protein (CAP) and enhanced by its interactions with actin-binding protein 1 (Abp1). We directly observe S. cerevisiae CAP and Abp1 rapidly transforming branched or linear actin networks by bundling and sliding filaments past each other, maximizing filament overlap, and promoting compaction into bundles. This activity does not require ATP and is conserved, as similar behaviors are observed for the mammalian homologs of CAP and Abp1. Coalescence depends on the CAP oligomerization domain but not the helical folded domain (HFD) that mediates its functions in F-actin severing and depolymerization. Coalescence by CAP-Abp1 further depends on interactions between CAP and Abp1 and interactions between Abp1 and F-actin. Our results are consistent with a mechanism in which the formation of energetically favorable sliding CAP and CAP-Abp1 crosslinks drives F-actin bundle compaction. Roles for CAP and CAP-Abp1 in actin remodeling in vivo are supported by strong phenotypes arising from deletion of the CAP oligomerization domain and by genetic interactions between sac6Δ and an srv2-301 mutant that does not bind Abp1. Together, these observations identify a new actin filament remodeling function for CAP, which is further enhanced by its direct interactions with Abp1.