The technique of direct observation of the growth of thin films involving the deposition of films inside the electron microscope, is described. Its merits, disadvantages, and limitations are discussed. The application of the technique to the study of the growth and intergrowth of the initial nuclei of a deposit, and also of larger compound islands, is described. It is shown that this can lead to appreciable “liquidlike” coalescence. The technique also provides detailed information on the manner in which the imperfection structure in the deposit changes as growth proceeds. The mechanisms of imperfection formation are discussed. If two islands of very different orientation coalesce, a recrystallization process can occur so that the fined compound island is in one single orientation. The general significance of this effect is discussed. The above phenomena are illustrated throughout by means of results obtained for the growth of gold on molybdenite(MoS2).