The selective transfer of material between membrane-delimited organelles is mediated by protein-coated vesicles. In many instances, formation of membrane trafficking intermediates is regulated by the GTP-binding protein Arf. Binding and hydrolysis of GTP by Arf was originally linked to the assembly and disassembly of vesicle coats. Arf GTPase-activating proteins (GAPs), a family of proteins that induce hydrolysis of GTP bound to Arf, were therefore proposed to regulate the disassembly and dissociation of vesicle coats. Following the molecular identification of Arf GAPs, the roles for GAPs and GTP hydrolysis have been directly examined. GAPs have been found to bind cargo and known coat proteins as well as directly contribute to vesicle formation, which is consistent with the idea that GAPs function as subunits of coat proteins rather than simply Arf inactivators. In addition, GTP hydrolysis induced by GAPs occurs largely before vesicle formation and is required for sorting. These results are the primary basis for modifications to the classical model for the function of Arf in transport vesicle formation, including a recent proposal that Arf has a proofreading, rather than a structural, role.