We have developed a new rapid cell-free assay for endocytic clathrin-coated vesicle formation using highly purified rat liver plasma membrane sheets. After incubation in the presence of cytosol and nucleotides, released vesicles were collected by high-speed centrifugation and incorporated cargo receptors were detected by Western blotting. Three different cargo receptors were internalized into vesicles while a receptor, known to be excluded from coated pits, was not. The recruitment of cargo receptors into the vesicle fraction was cytosol, ATP and temperature-dependent and was enhanced by addition of GTP. Vesicle formation in this assay was confirmed by subcellular fractionation and EM analysis. Plasma membranes stripped of their endogenous coat proteins with 0.5 m Tris retained vesicle formation activity, which was highly dependent on clathrin and dynamin. Coat proteins and dynamin were not sufficient for clathrin-coated vesicle formation, and other peripheral membrane proteins recruited from the cytosol are required. The nonhydrolyzable ATP analogue, AMPPNP did not support clathrin-coated vesicle formation; however, surprisingly, GTP gamma S was as effective as GTP. This assay will provide a powerful tool to dissect the minimum machinery and to probe the hierarchy of events involved in cargo selection and endocytic clathrin-coated vesicle formation.