ArfGAP1 promotes GTP hydrolysis in Arf1, a small G protein that interacts with lipid membranes and drives the assembly of the COPI coat in a GTP-dependent manner. The activity of ArfGAP1 increases with membrane curvature, suggesting a negative feedback loop in which COPI-induced membrane deformation determines the timing and location of GTP hydrolysis within a coated bud. Here we show that a central sequence of about 40 amino acids in ArfGAP1 acts as a lipid-packing sensor. This ALPS motif (ArfGAP1 Lipid Packing Sensor) is also found in the yeast homologue Gcs1p and is necessary for coupling ArfGAP1 activity with membrane curvature. The ALPS motif binds avidly to small liposomes and shows the same hypersensitivity on liposome radius as full-length ArfGAP1. Site-directed mutagenesis, limited proteolysis and circular dichroism experiments suggest that the ALPS motif, which is unstructured in solution, inserts bulky hydrophobic residues between loosely packed lipids and forms an amphipathic helix on highly curved membranes. This helix differs from classical amphipathic helices by the abundance of serine and threonine residues on its polar face.