The budding of clathrin-coated vesicles is essential for protein transport. After budding, clathrin must be uncoated before the vesicles can fuse with other membranous structures. In vitro, the molecular chaperone Hsc70 uncoats clathrin-coated vesicles in an ATP-dependent process that requires a specific J-domain protein such as auxilin. However, there is little evidence that either Hsc70 or auxilin is essential in vivo. Here we show that C. elegans has a single auxilin homologue that is identical to mammalian auxilin in its in vitro activity. When RNA-mediated interference (RNAi) is used to inhibit auxilin expression in C. elegans, oocytes show markedly reduced receptor-mediated endocytosis of yolk protein tagged with green fluorescent protein (GFP). In addition, most of these worms arrest during larval development, exhibit defective distribution of GFP-clathrin in many cell types, and show a marked change in clathrin dynamics, as determined by fluorescence recovery after photobleaching (FRAP). We conclude that auxilin is required for in vivo clathrin-mediated endocytosis and development in C. elegans.