The GTPase dynamin catalyzes the scission of deeply invaginated clathrin-coated pits at the plasma membrane, but the mechanisms governing dynamin-mediated membrane fission remain poorly understood. Through mutagenesis, we have altered the hydrophobic nature of the membrane-inserting variable loop 1 (VL1) of the pleckstrin homology (PH) domain of dynamin-1 and demonstrate that its stable insertion into the lipid bilayer is critical for high membrane curvature generation and subsequent membrane fission. Dynamin PH domain mutants defective in curvature generation regain function when assayed on precurved membrane templates in vitro, but they remain defective in the scission of clathrin-coated pits in vivo. These results demonstrate that, in concert with dynamin self-assembly, PH domain membrane insertion is essential for fission and vesicle release in vitro and for clathrin-mediated endocytosis in vivo.