Atmospheric conditions on Saturn's largest satellite, Titan, allow the possibility that it could possess a methane condensation and precipitation cycle with many similarities to Earth's hydrological cycle. Detailed imaging studies of Titan have hitherto shown no direct evidence for tropospheric condensation clouds, although there has been indirect spectroscopic evidence for transient clouds. Here we report images and spectra of Titan that show clearly transient clouds, concentrated near the south pole, which is currently near the point of maximum solar heating. The discovery of these clouds demonstrates the existence of condensation and localized moist convection in Titan's atmosphere. Their location suggests that methane cloud formation is controlled seasonally by small variations in surface temperature, and that the clouds will move from the south to the north pole on a 15-year timescale.