The Kuiper belt is a disk of icy bodies that orbit the Sun beyond Neptune; the largest known members are Pluto and its companion Charon. A few per cent of Kuiper-belt bodies have recently been found to be binaries with wide separations and mass ratios of the order of unity. Collisions were too infrequent to account for the observed number of binaries, implying that these binaries formed through collisionless interactions mediated by gravity. These interactions are likely to have been most effective during the period of runaway accretion, early in the Solar System's history. Here we show that a transient binary forms when two large bodies penetrate one another's Hill sphere (the region where their mutual forces are larger than the tidal force of the Sun). The loss of energy needed to stabilize the binary orbit can then occur either through dynamical friction from surrounding small bodies, or through the gravitational scattering of a third large body. Our estimates slightly favour the former mechanism. We predict that five per cent of Kuiper-belt objects are binaries with apparent separations greater than 0.2 arcsec, and that most are in tighter binaries or systems of higher multiplicity.