Clathrin-coated vesicles carry traffic from the plasma membrane to endosomes. We report here the real-time visualization of cargo sorting and endocytosis by clathrin-coated pits in living cells. We have detected the formation of coats by monitoring incorporation of fluorescently tagged clathrin or its adaptor AP-2; we have also followed clathrin-mediated uptake of transferrin and of single LDL or reovirus particles. The intensity of a cargo-loaded clathrin cluster grows steadily during its lifetime, and the time required to complete assembly is proportional to the size of the cargo particle. These results are consistent with a nucleation-growth mechanism and an approximately constant growth rate. There are no strongly preferred nucleation sites. A proportion of the nucleation events are weak and short lived. Cargo incorporation occurs primarily or exclusively in a newly formed coated pit. Our data lead to a model in which coated pits initiate randomly but collapse unless stabilized, perhaps by cargo capture.