Secretory proteins traffic from the ER to the Golgi via COPII-coated transport vesicles. The five core COPII proteins (Sar1p, Sec23/24p, and Sec13/31p) act in concert to capture cargo proteins and sculpt the ER membrane into vesicles of defined geometry. The molecular details of how the coat proteins deform the lipid bilayer into vesicles are not known. Here we show that the small GTPase Sar1p directly initiates membrane curvature during vesicle biogenesis. Upon GTP binding by Sar1p, membrane insertion of the N-terminal amphipathic α helix deforms synthetic liposomes into narrow tubules. Replacement of bulky hydrophobic residues in the α helix with alanine yields Sar1p mutants that are unable to generate highly curved membranes and are defective in vesicle formation from native ER membranes despite normal recruitment of coat and cargo proteins. Thus, the initiation of vesicle budding by Sar1p couples the generation of membrane curvature with coat-protein assembly and cargo capture.