Summary: We develop a dynamic generalized conditional gradient method (DGCG) for dynamic inverse problems with optimal transport regularization. We consider the framework introduced in Bredies and Fanzon (ESAIM: M2AN 54:2351-2382, 2020), where the objective functional is comprised of a fidelity term, penalizing the pointwise in time discrepancy between the observation and the unknown in time-varying Hilbert spaces, and a regularizer keeping track of the dynamics, given by the Benamou-Brenier energy constrained via the homogeneous continuity equation. Employing the characterization of the extremal points of the Benamou-Brenier energy (Bredies et al. in Bull Lond Math Soc 53(5):1436-1452, 2021), we define the atoms of the problem as measures concentrated on absolutely continuous curves in the domain. We propose a dynamic generalization of a conditional gradient method that consists of iteratively adding suitably chosen atoms to the current sparse iterate, and subsequently optimizing the coefficients in the resulting linear combination. We prove that the method converges with a sublinear rate to a minimizer of the objective functional. Additionally, we propose heuristic strategies and acceleration steps that allow to implement the algorithm efficiently. Finally, we provide numerical examples that demonstrate the effectiveness of our algorithm and model in reconstructing heavily undersampled dynamic data, together with the presence of noise.