Nanostructured materials exhibit superior physical and mechanical properties, and they hold great promise for enabling the development of novel micro/nano electromechanical systems. A fundamental understanding of the mechanical deformation and degradation in nanostructured materials is critical for designing the damage-tolerant nanostructures and devices. The in situ transmission electron microscopy provides a novel approach to uncover the dynamic deformation mechanisms in nanostructured materials, especially at the atomic scale. This review presents an overview of recent progress in the atomic-scale study of mechanical properties, dynamic deformation and degradation in a variety of nanostructured materials. Experimental techniques for in situ nanomechanical testing are reviewed. New insights into the atomic-level mechanical behavior of nanostructured materials are described, including surface-mediated defect processes, size-dependent deformation mechanisms, plastic deformation of nanotwinned and nanocrystalline materials, phase transformation, liquid-like behavior and pseudoelasticity, bending and fatigue, etc. Future research on the in situ nanomechanics is also discussed. Ultimately, the in situ nanomechanics study will enable a complete understanding of the atomic-scale dynamic deformation, thereby providing a mechanistic basis of the rational design and fabrication of durable nanomaterials and nanodevices.