Localization of dynein-green fluorescent protein (GFP) to cytoplasmic microtubules allowed us to obtain one of the first views of the dynamic properties of astral microtubules in live budding yeast. Several novel aspects of microtubule function were revealed by time-lapse, three-dimensional fluorescence microscopy. Astral microtubules, about four to six in number for each pole, exhibited asynchronous dynamic instability throughout the cell cycle, growing at approximately 0.3-1.5 micron/min toward the cell surface then switching to shortening at similar velocities back to the spindle pole body (SPB). During interphase, a conical array of microtubules trailed the SPB as the nucleus traversed the cytoplasm. Microtubule disassembly by nocodozole inhibited these movements, indicating that the nucleus was pushed around the interior of the cell via dynamic astral microtubules. These forays were evident in unbudded G1 cells, as well as in late telophase cells after spindle disassembly. Nuclear movement and orientation to the bud neck in S/G2 or G2/M was dependent on dynamic astral microtubules growing into the bud. The SPB and nucleus were then pulled toward the bud neck, and further microtubule growth from that SPB was mainly oriented toward the bud. After SPB separation and central spindle formation, a temporal delay in the acquisition of cytoplasmic dynein at one of the spindle poles was evident. Stable microtubule interactions with the cell cortex were rarely observed during anaphase, and did not appear to contribute significantly to spindle alignment or elongation into the bud. Alterations of microtubule dynamics, as observed in cells overexpressing dynein-GFP, resulted in eventual spindle misalignment. These studies provide the first mechanistic basis for understanding how spindle orientation and nuclear positioning are established and are indicative of a microtubule-based searching mechanism that requires dynamic microtubules for nuclear migration into the bud.