The microtubule cytoskeleton is thought to be intimately involved in generating and maintaining cell polarity and can generate many different morphological structures from a few structural elements. The mechanism by which these structures are generated has been partially elucidated from studies of microtubule polymerization both in vitro and in vivo. Microtubules in vitro exist in growing (polymerizing) and shrinking (depolymerizing) populations that interconvert infrequently. This behaviour, termed dynamic instability, permits microtubules in the cell rapidly to explore different arrangements and allows selective stabilization of specific morphologies. To investigate the regulation of these processes, we have implemented techniques for direct observation of fluorescently labelled microtubules and developed them to observe the dynamic behaviour of individual microtubules in single living cells. Sammak and Borisy recently used this technique to show that the dynamics of microtubules in fibroblasts is explained by dynamic instability. Although we also conclude here that dynamic instability explains much of microtubule behaviour in vivo, we find significant deviations from the properties of tubulin in vitro. These results suggest that local cytoplasmic factors strongly influence microtubule dynamics; such control has important implications for cellular morphogenesis.