Dynein is the primary motor responsible for nearly all motility and force generation towards the minus ends of microtubules (MTs) in cells. The dynamics of dynein stepping have been poorly characterized by tracking flexible regions at limited resolution. We developed a cysteine-light mutant of dynein and site-specifically labeled its MT-binding domain.  MINFLUX tracking at sub-millisecond resolution revealed that dynein hydrolyzes one ATP per step and takes multitudes of 8 nm steps. The stepping monomer takes backward “dips” due to MT release and subsequent diffusion around the MT-bound partner before a minus-end-directed conformational change of its linker. Our results reveal the order of events that result in a productive step of dynein.