We have used fluorescent protein tagging to study the localization and dynamics of the actin-binding protein cortactin in living NIH 3T3 fibroblast cells. Cortactin was localized to active lamellipodia and to small cytoplasmic spots. Time-lapse imaging revealed that these cortactin labeled structures were very dynamic. In the lamellipodia, cortactin labeled structures formed at the leading edge and then moved toward the cell center. Experiments with green fluorescent protein (GFP)-tagged actin showed that cortactin movement was coincident with the actin retrograde flow in the lamellipodia. Cytoplasmic cortactin spots also contained F-actin and were propelled by actin polymerization. Arp3, a component of the arp2/3 complex which is a key regulator of actin polymerization, co-localized with cortactin. Cytoplasmic cortactin-labeled spots were found to be associated with endosomal vesicles. Association was asymmetric and approximately half of the endosomes were associated with cortactin spots. Time-lapse imaging suggested that these cortactin and F-actin-containing spots propelled endosomes. Actin polymerization based propulsion may be a common mechanism for endomembrane trafficking in the same manner as used in the plasma membrane protrusions. As cortactin is known to interact with membrane-associated signaling proteins it could have a role in linking signaling complexes with dynamic actin on endosomes and in lamellipodia.