Disruption of the dystroglycan gene in humans and mice leads to muscular dystrophies and nervous system defects including malformation of the brain and defective synaptic transmission. To identify proteins that interact with dystroglycan in the brain we have used immunoaffinity purification followed by mass spectrometry (LC/MS-MS) and found that the GTPase dynamin 1 is a novel dystroglycan-associated protein. The beta-dystroglycan-dynamin 1 complex also included alpha-dystroglycan and Grb2. Overlay assays indicated that dynamin interacts directly with dystroglycan, and immunodepletion showed that only a pool of dynamin is associated with dystroglycan. Dystroglycan was associated and colocalized immunohistochemically with dynamin 1 in the central nervous system in the outer plexiform layer of retina where photoreceptor terminals are found. Endocytosis in neurons is both constitutive, as in non-neural cells, and regulated by neural activity. To assess the function of dystroglycan in the former, we have assayed transferrin uptake in fibroblastic cells differentiated from embryonic stem cells null for both dystroglycan alleles. In wild-type cells, dystroglycan formed a complex with dynamin and codistributed with cortactin at membrane ruffles, which are organelles implicated in endocytosis. Dystroglycan-null cells had a significantly greater transferrin uptake, a process well known to require dynamin. Expression of dystroglycan in null cells by infection with an adenovirus containing dystroglycan reduced transferrin uptake to levels seen in wild-type embryonic stem cells. These data suggest that dystroglycan regulates endocytosis possibly as a result of its interaction with dynamin.