Proper orientation of the mitotic spindle is critical for successful cell division in budding yeast. To investigate the mechanism of spindle orientation, we used a green fluorescent protein (GFP)-tubulin fusion protein to observe microtubules in living yeast cells. GFP-tubulin is incorporated into microtubules, allowing visualization of both cytoplasmic and spindle microtubules, and does not interfere with normal microtubule function. Microtubules in yeast cells exhibit dynamic instability, although they grow and shrink more slowly than microtubules in animal cells. The dynamic properties of yeast microtubules are modulated during the cell cycle. The behavior of cytoplasmic microtubules revealed distinct interactions with the cell cortex that result in associated spindle movement and orientation. Dynein-mutant cells had defects in these cortical interactions, resulting in misoriented spindles. In addition, microtubule dynamics were altered in the absence of dynein. These results indicate that microtubules and dynein interact to produce dynamic cortical interactions, and that these interactions result in the force driving spindle orientation.