The centrosome nucleates microtubule polymerization, affecting microtubule number, polarity, and structure. We use an in vitro system based on extracts of Xenopus eggs to examine the role of gamma-tubulin in centrosome assembly and function. gamma-Tubulin is present in the cytoplasm of frog eggs and vertebrate somatic cells in a large approximately 25S complex. The egg extracts assemble centrosomes around sperm centrioles. Formation of a centrosome in the extract requires both the gamma-tubulin complex and ATP and can take place in the absence of microtubules. gamma-Tubulin is not present on the sperm prior to incubation in extract, but is recruited from the cytoplasm during centrosome assembly. The gamma-tubulin complex also binds to microtubules, likely the minus end, independent of the centrosome. These results suggest that gamma-tubulin is an essential component of the link between the centrosome and the microtubule, probably playing a direct role in microtubule nucleation.