An understanding of the hierarchical nanostructure formation is of significant importance for the design of advanced functional materials. Here, we report the in situ study of lead sulfide (PbS) growth on gold (Au) nanorod seeds using liquid cell transmission electron microscopy (TEM). By tracking the formation dynamics of Au-PbS core-shell nanoparticles, we found the preferential heterogeneous nucleation of PbS on the ends of a Au nanorod prior to the development of a complete PdS shell. During PbS shell growth, drastic sulfidation of Au nanorod was observed, leading to large volume shrinkage (up to 50%) of the initial Au nanorod seed. We also captured intriguing wavy interfacial behavior, which can be explained by our DFT calculation results that the local strain gradient at the core-shell interface facilitates the mass transport and mediates reversible phase transitions of Au ↔ Au2S during the PbS shell growth. © 2016 American Chemical Society.