Time-resolved electron diffraction with atomic-scale spatial and temporal resolution was used to unravel the transformation pathway in the photoinduced structural phase transition of vanadium dioxide. Results from bulk crystals and single-crystalline thin-films reveal a common, stepwise mechanism: First, there is a femtosecond V−V bond dilation within 300 fs, second, an intracell adjustment in picoseconds and, third, a nanoscale shear motion within tens of picoseconds. Experiments at different ambient temperatures and pump laser fluences reveal a temperature-dependent excitation threshold required to trigger the transitional reaction path of the atomic motions.