Solid-state phase transformation is an intriguing phenomenon in crystalline or noncrystalline solids due to the distinct physical and chemical properties that can be obtained and modified by phase engineering. Compared to bulk solids, nanomaterials exhibit enhanced capability for phase engineering due to their small sizes and high surface-to-volume ratios, facilitating various emerging applications. To establish a comprehensive atomistic understanding of phase engineering, in situ transmission electron microscopy (TEM) techniques have emerged as powerful tools, providing unprecedented atomic-resolution imaging, multiple characterization and stimulation mechanisms, and real-time integrations with various external fields. In this Review, we present a comprehensive overview of recent advances in in situ TEM studies to characterize and modulate nanomaterials for phase transformations under different stimuli, including mechanical, thermal, electrical, environmental, optical, and magnetic factors. We briefly introduce crystalline structures and polymorphism and then summarize phase stability and phase transformation models. The advanced experimental setups of in situ techniques are outlined and the advantages of in situ TEM phase engineering are highlighted, as demonstrated via several representative examples. Besides, the distinctive properties that can be obtained from in situ phase engineering are presented. Finally, current challenges and future research opportunities, along with their potential applications, are suggested.