Cytokinesis requires the coordination of many cellular complexes, particularly those involved in the constriction and reconstruction of the plasma membrane in the cleavage furrow. We have investigated the regulation and function of vesicle transport and fusion during cytokinesis in budding yeast. By using time-lapse confocal microscopy, we show that post-Golgi vesicles, as well as the exocyst, a complex required for the tethering and fusion of these vesicles, localize to the bud neck at a precise time just before spindle disassembly and actomyosin ring contraction. Using mutants affecting cyclin degradation and the mitotic exit network, we found that targeted secretion, in contrast to contractile ring activation, requires cyclin degradation but not the mitotic exit network. Analysis of cells in late anaphase bearing exocyst and myosin V mutations show that both vesicle transport and fusion machineries are required for the completion of cytokinesis, but this is not due to a delay in mitotic exit or assembly of the contractile ring. Further investigation of the dynamics of contractile rings in exocyst mutants shows these cells may be able to initiate contraction but often fail to complete the contraction due to premature disassembly during the contraction phase. This phenotype led us to identify Chs2, a transmembrane protein targeted to the bud neck through the exocytic pathway, as necessary for actomyosin ring stability during contraction. Chs2, as the chitin synthase that produces the primary septum, thus couples the assembly of the extracellular matrix with the dynamics of the contractile ring during cytokinesis.