Efficient internalization of cell surface receptors requires actin polymerization mediated by Arp2/3 complex and cortactin, a prominent substrate of the protein-tyrosine kinase Src. However, the significance of cortactin tyrosine phosphorylation in endocytosis is unknown. We found that overexpression of a cortactin mutant deficient in tyrosine phosphorylation decreased transferrin uptake. Suppression of cortactin expression by RNA interference also reduced transferrin internalization. Such inhibition was effectively rescued by overexpressing wild-type cortactin but not a cortactin mutant deficient in tyrosine phosphorylation or a mutant with deletion of the Src homology 3 domain. Likewise, purified phosphorylation-null cortactin failed to restore the formation of clathrin-coated vesicles in a cortactin-depleted cell extract. In vitro analysis revealed that Src-mediated phosphorylation enhanced the association of cortactin with dynamin-2 in a tyrosine phosphorylation-dependent manner. Quantitative analysis demonstrated that Src enhances the affinity of cortactin for dynamin-2 by more than 3-fold. On the other hand, Src-treated dynamin-2 had no effect on its interaction with cortactin. These data indicate that Src kinase is implicated in clathrin-mediated endocytosis by phosphorylation of cortactin.