Determining how microtubules (MTs) are nucleated is essential for understanding how the cytoskeleton assembles. Yet, half a century after the discovery of MTs and αβ-tubulin subunits and decades after the identification of the γ-tubulin ring complex (γ-TuRC) as the universal MT nucleator, the underlying mechanism largely remains a mystery. Using single molecule studies, we uncover that γ-TuRC nucleates a MT more efficiently than spontaneous assembly. The laterally interacting array of γ-tubulins on γ-TuRC facilitates the lateral association of αβ-tubulins, while longitudinal affinity between γ/αβ-tubulin is surprisingly weak. During nucleation, 3-4 αβ-tubulin dimers bind stochastically to γ-TuRC on average until two of them create a lateral contact and overcome the nucleation barrier. Although γ-TuRC defines the nucleus, XMAP215 significantly increases reaction efficiency by facilitating αβ-tubulin incorporation. In sum, we elucidate how MT initiation occurs from γ-TuRC and determine how it is regulated.