Vertically stacked low‐dimensional heterostructures are outstanding systems both for exploring fundamental physics and creating new devices. Due to nanometer‐scale building blocks, atomic scale phenomena become for them of fundamental importance, including during device operation. These can be accessed in situ in aberration‐corrected scanning transmission electron microscopy (STEM) experiments. Here, the dynamics of a graphene‐MoS2 heterostructure are studied under Joule heating, where the graphene serves as a high temperature atomically thin and electron transparent “hot plate” for the MoS2. Structural dynamics and evolution of the system are shown at the atomic scale, demonstrating that at the highest temperatures (estimated to exceed 2000 K), the continuous 2D MoS2 transforms into separated 3D nanocrystals, initiated by sulfur vacancy creation and migration followed by formation of voids and clustering at their edges. The resulting nanocrystals exhibit predominantly hexagonal shapes with the 2H and hybrid (2H/3R, 3R/TZ) polytypes. The observed morphology of the crystals is further discussed during and after the transformation, as well as their different edge configurations and stability under electron irradiation. These observations of MoS2 at extreme temperatures provide insights into the operation of devices based on graphene/MoS2 heterostructures and ultimately may help device fabrication techniques to create MoS2‐based nanostructures, for example, in hydrogen evolution reaction applications.