Dynamic instability is an intrinsic property of microtubules; however, we do not understand what domains of αβ-tubulins regulate this activity or how these regulate microtubule networks in cells. Here, we define a role for the negatively charged carboxy-terminal tail (CTT) domain of β-tubulin in regulating dynamic instability. By combining in vitro studies with purified mammalian tubulin and in vivo studies with tubulin mutants in budding yeast, we demonstrate that β-tubulin CTT inhibits microtubule stability and regulates the structure and stability of microtubule plus ends. Tubulin that lacks β-tubulin CTT polymerizes faster and depolymerizes slower in vitro and forms microtubules that are more prone to catastrophe. The ends of these microtubules exhibit a more blunted morphology and rapidly switch to disassembly after tubulin depletion. In addition, we show that β-tubulin CTT is required for magnesium cations to promote depolymerization. We propose that β-tubulin CTT regulates the assembly of stable microtubule ends and provides a tunable mechanism to coordinate dynamic instability with ionic strength in the cell.