The surfaces of many bacteria are decorated with long, exquisitely thin appendages called type IV pili (T4P), dynamic filaments that are rapidly polymerized and depolymerized from a pool of pilin subunits. Cycles of pilus extension, binding and retraction enable T4P to perform a phenomenally diverse array of functions, including twitching motility, DNA uptake and microcolony formation. On the basis of recent developments, a comprehensive understanding is emerging of the molecular architecture of the T4P machinery and the filament it builds, providing mechanistic insights into the assembly and retraction processes. Combined microbiological and biophysical approaches have revealed how T4P dynamics influence self-organization of bacteria, how bacteria respond to external stimuli to regulate T4P activity for directed movement, and the role of T4P retraction in surface sensing. In this Review, we discuss the T4P machine architecture and filament structure and present current molecular models for T4P dynamics, with a particular focus on recent insights into T4P retraction. We also discuss the functional consequences of T4P dynamics, which have important implications for bacterial lifestyle and pathogenesis.