Cytokinesis defines the last stage in the division cycle, in which cell constriction leads to the formation of daughter cells. The biochemical mechanisms responsible for this process are poorly understood. In bacteria, the ftsZ gene product, FtsZ, is required for cell division, playing a prominent role in cytokinesis. The cellular concentration of FtsZ regulates the frequency of division and genetic studies have indicated that it is the target of several endogenous division inhibitors. At the time of onset of septal invagination, the FtsZ protein is recruited from the cytoplasm to the division site, where it assembles into a ring that remains associated with the leading edge of the invaginating septum until septation is completed. Here we report that FtsZ specifically binds and hydrolyses GTP. The reaction can be dissociated into a GTP-dependent activation stage that is markedly affected by the concentration of FtsZ, and a hydrolysis stage in which GTP is hydrolysed to GDP. The results indicate that GTP binding and hydrolysis are important in enabling FtsZ to support bacterial cytokinesis, either by facilitating the assembly of the FtsZ ring and/or by catalysing an essential step in the cytokinetic process itself.