The large GTPase dynamin assembles into higher order structures that are thought to promote endocytosis. Dynamin also regulates the actin cytoskeleton through an unknown, GTPase‐dependent mechanism. Here, we identify a highly conserved site in dynamin that binds directly to actin filaments and aligns them into bundles. Point mutations in the actin‐binding domain cause aberrant membrane ruffling and defective actin stress fibre formation in cells. Short actin filaments promote dynamin assembly into higher order structures, which in turn efficiently release the actin‐capping protein (CP) gelsolin from barbed actin ends in vitro, allowing for elongation of actin filaments. Together, our results support a model in which assembled dynamin, generated through interactions with short actin filaments, promotes actin polymerization via displacement of actin‐CPs.