Using a novel technique for real-time transverse beam profile diagnostics of a stored ion beam, we have observed the transverse size of a stored laser-cooled ion beam. Earlier we observed that the density of the beam is independent of the beam current. At very low currents, we observe an abrupt change in this behavior: The vertical beam size increases suddenly by about an order of magnitude. This observation implies a sudden change in the indirect vertical cooling mediated by intrabeam scattering. Our results have serious implications for the ultimate beam quality attainable by laser cooling. DOI: 10.1103/PhysRevLett.87.274801 PACS numbers: 29.20.Dh, 29.27.Bd, 42.50.Vk, 52.27.Jt Laser cooling in a storage ring [1] has been demonstrated to be a powerful tool for creating ultracold and dense stored ion beams [2]. Cold and dense beams are of interest for many storage ring applications, and the ultimate state for such beams is the attainment of ion beam crystallization [3].Using a novel technique for transverse beam profile diagnostics, we have studied the development of the transverse beam size of a stored, laser-cooled, low-current coasting ion beam in the ASTRID storage ring. Earlier we observed that the maximum density of a stored lasercooled ion beam is limited by the space charge tune shift [2]. In this Letter, we present experimental evidence of a deviation from this behavior at very low ion beam currents. During continuous observation of the transverse beam size of the stored beam, we observe how the beam size is reduced as the beam current decays due to charge exchange with the residual gas in the storage ring. At a certain point in time (and thus beam current), we observe that the vertical beam size increases dramatically, while at the same time the horizontal beam size decreases. The current at which this happens depends on the cooling power, the laser detuning, and the laser polarization. The circulating beam current at the time of this observation is below the maximum current at which a "string" (a onedimensional ordered beam [3]) may exist in the machine. We argue that this low-current vertical blowup of the beam arises due to a sudden reduction of the indirect transverse cooling mediated by intrabeam scattering (IBS), which thus no longer compensates the diffusive heating caused by the spontaneous emission of photons during laser cooling. The horizontal dimension, however, is cooled by the dispersive coupling between the horizontal and the longitudinal dimensions [4] and thus does not blow up. Our results indicate that there may be serious limitations to the possibility of using laser cooling in the creation of a crystalline beam. These observations have been made possible by the use of a novel technique for studying the transverse beam profile of a stored ion beam. By imaging the fluorescent light from the laser-excited ion beam onto a high resolution, image intensified, charge-coupled device (CCD) camera, we can directly monitor the beam profile in real time, and that with a much higher sensitiv...