Microtubules act as "railways" for motor-driven intracellular transport, interact with accessory proteins to assemble into larger structures such as the mitotic spindle, and provide an organizational framework to the rest of the cell. Key to these functions is the fact that microtubules are "dynamic." As with actin, the polymer dynamics are driven by nucleotide hydrolysis and influenced by a host of specialized regulatory proteins, including microtubule-associated proteins. However, microtubule turnover involves a surprising behavior—termed dynamic instability—in which individual polymers switch stochastically between growth and depolymerization. Dynamic instability allows microtubules to explore intracellular space and remodel in response to intracellular and extracellular cues. Here, we review how such instability is central to the assembly of many microtubule-based structures and to the robust functioning of the microtubule cytoskeleton.