Rational catalyst design requires an atomic scale mechanistic understanding of the chemical pathways involved in the catalytic process. A heterogeneous catalyst typically works by adsorbing reactants onto its surface, where the energies for specific bonds to dissociate and/or combine with other species (to form desired intermediate or final products) are lower. Here, using the catalytic growth of single-walled carbon nanotubes (SWCNTs) as a prototype reaction, we show that the chemical pathway may in fact involve the entire catalyst particle, and can proceed via the fluctuations in the formation and decomposition of metastable phases in the particle interior. We record in situ and at atomic resolution, the dynamic phase transformations occurring in a cobalt catalyst nanoparticle during SWCNT growth, using a state-of-the-art environmental transmission electron microscope (ETEM). The fluctuations in catalyst carbon content are quantified by the automated, atomic-scale structural analysis of the time-resolved ETEM images and correlated with the SWCNT growth rate. We find the fluctuations in the carbon concentration in the catalyst nanoparticle and the fluctuations in nanotube growth rates to be of complementary character. These findings are successfully explained by reactive molecular dynamics (RMD) simulations that track the spatial and temporal evolution of the distribution of carbon atoms within and on the surface of the catalyst particle. We anticipate that our approach, combining real-time, atomic-resolution image analysis and molecular dynamics simulations, will facilitate catalyst design, improving reaction efficiencies and selectivity toward the growth of desired structure. Published by Elsevier Inc.