Dynamin is essential for clathrin-dependent coated vesicle formation. It is required for membrane budding at a late stage during the transition from a fully formed pit to a pinched-off vesicle. Dynamin may also fulfill other roles during earlier stages of vesicle formation. We have screened about 16,000 small molecules and have identified 1, named here dynasore, that interferes in vitro with the GTPase activity of dynamin1, dynamin2, and Drp1, the mitochondrial dynamin, but not of other small GTPases. Dynasore acts as a potent inhibitor of endocytic pathways known to depend on dynamin by rapidly blocking coated vesicle formation within seconds of dynasore addition. Two types of coated pit intermediates accumulate during dynasore treatment, ∪-shaped, half formed pits and O-shaped, fully formed pits, captured while pinching off. Thus, dynamin acts at two steps during clathrin coat formation; GTP hydrolysis is probably needed at both steps.