Elucidating the growth mechanism of carbon nanotubes (CNTs) is critical to obtaining CNTs with desired structures and tailored properties for their practical applications. With atomic resolution imaging, in situ transmission electron microscopy (TEM) has been a key technique to reveal the microstructure and dynamics of CNTs in real time. In this review, recent advances in the development of in situ TEM with different types of environmental reactors will be introduced. The catalytic growth mechanisms of CNTs revealed by in situ TEM under realistic conditions are discussed from fundamental thermodynamics and kinetics to the detailed nucleation, growth, and termination mechanisms, including the state and phase of active catalysts, interfacial connections between catalyst and growing CNTs, and catalyst-related growth kinetics of CNTs. Great progresses have been made on how a CNT nucleates, grows and terminates, focusing on the interface dynamics and kinetic fluctuations. Finally, challenges and future directions for understanding the atomic dynamics under the real growth conditions are proposed. It is expected that breakthroughs in the fundamental growth mechanisms will pave the way to the ultimate goal of designing and controlling the atomic structures of CNTs for their applications in various devices.