We describe here real-time, in situ observations of the formation of nanosize germanium (Ge) islands on silicon (Si). The deposition of Ge onto electron-transparent Si(100) takes place in a UHV transmission electron microscope that has been modified to allow chemical vapor deposition to be carried out in the polepiece. We recorded the growth process at video rate and were therefore able to follow the evolution of individual islands. As the islands grew, we observed a coarsening process similar to classical Ostwald ripening, but which leads at certain times to a bimodal distribution of island sizes. We show that this phenomenon can be understood using a model in which a conventional coarsening process is modified by a transition between two different island shapes.