Magnetospirillum gryphiswaldense MSR-1 synthesizes membrane-enclosed magnetite (Fe3O4) nanoparticles, called magnetosomes, for magnetic navigation. Formation of these unique organelles involves a complex process comprising several key steps which are governed by specific magnetosome-associated proteins. One of the most important proteins in this process is the cation diffusion facilitator (CDF) family member MamB, which has been implicated in magnetosome-directed iron transport. While deletion mutagenesis studies revealed that MamB is essential for the formation of magnetosome membrane vesicles however, its precise role remains elusive. In this study, we employed a multi-disciplinary approach to define the role of MamB during magnetosome formation. Using site-directed mutagenesis complemented by structural analyses, fluorescence microscopy and cryo-electron tomography, we show that MamB is an active magnetosome-directed transporter serving two distinct, yet essential functions. First, MamB initiates magnetosome vesicle formation in a transport-independent process, probably by serving as a landmark protein. Second, MamB transport activity is required for magnetite nucleation. Furthermore, by determining the crystal structure of the MamB cytosolic C-terminal domain, we also provide mechanistic insight into transport regulation. Additionally, we present evidence that magnetosome vesicle growth and chain formation are independent of magnetite nucleation and magnetic interactions, respectively. Together, our data provide novel insight into the role of the key bifunctional magnetosome protein MamB, and the early steps of magnetosome formation.