Infotainment service has been a foreseeing trend in VANETs (Vehicular Ad Hoc Networks), and multimedia streaming has a high potential in VANET infotainment service. This paper considers the scenario of live multimedia streaming multicast to vehicles of the same group using a dynamic application layer overlay. Due to the willingness for cooperation of non-group nodes, application layer overlay multicast is more feasible than other kinds of multicast such as network-coding-based multicast and network-layer multicast. To adapt to high mobility and full of obstacles in urban VANETs, we propose an effective dynamic overlay multicast scheme for multimedia streaming, called OMV (Overlay Multicast in VANETs). The proposed OMV enhances an overlay’s stability with two strategies: (1) QoS-satisfied dynamic overlay and (2) mesh-structure overlay. The QoS-satisfied strategy to adjust the overlay selects potential new parents based on their streams’ packet loss rates and end-to-end delays. The mesh-structure strategy allows a child to have multiple parents. We evaluate the proposed OMV in urban VANETs with obstacles using two real video clips to demonstrate the feasibility of the OMV for real videos. Evaluation results show that comparing the proposed OMV to Qadri et al.’s work, which is a static mesh overlay and is the best method available in VANETs, the packet loss rate is reduced by 27.1% and the end-to-end delay is decreased by 11.7%, with a small control overhead of 2.1%, on average. Comparing the proposed OMV for tree overlays to ALMA, which is for dynamic tree multicast overlays and is also the best method available in MANETs, the packet loss rate is reduced by 7.1% and the end-to-end delay is decreased by 13.1%. In addition, to address the problem of obstacle-prone urban VANETs, we also derive feasible stream rates and overlay sizes for city maps with different road section sizes. To the best of our knowledge, how to organize and dynamically adjust an application layer multicast overlay for live multimedia streaming have not been studied in existing VANET literatures. In summary, to deal with highly dynamic topologies in urban VANETs, we propose a QoS-satisfied strategy for group nodes to switch to new parents that can offer better QoS. The proposed OMV is feasible for live multimedia streaming applications, such as emergency live video transmission and live video tour guides for passengers in different vehicles that belong to the same multicast group.