A new file organisation called dynamic hashing is presented. The organisation is based on normal hashing, but the allocated storage space can easily be increased and decreased without reorganising the file, according to the number of records actually stored in the file. The expected storage utilisation is analysed and is shown to be approximately 69% all the time. Algorithms for inserting and deleting a record are presented and analysed. Retrieval of a record is fast, requiring only one access to secondary storage. There are no overflow records. The proposed scheme necessitates maintenance of a relatively small index structured as a forest of binary trees or slightly modified binary tries. The expected size of the index is analysed and a compact representation of the index is suggested.