Somites are paired embryonic segments that form in a regular sequence from unsegmented mesoderm during vertebrate development. Although transient structures they are of fundamental importance as they generate cell lineages of the musculoskeletal system in the trunk such as cartilage, tendon, bone, endothelial cells and skeletal muscle. Surprisingly, very little is known about cellular dynamics underlying the morphological transitions during somite differentiation. Here, we address this by examining cellular rearrangements and morphogenesis in differentiating somites using live multi-photon imaging of transgenic chick embryos, where all cells express a membrane-bound GFP. We specifically focussed on the dynamic cellular changes in two principle regions within the somite, the medial and lateral domains, to investigate extensive morphological transformations. Furthermore, by using quantitative analysis and cell tracking, we capture for the first time a directed movement of dermomyotomal progenitor cells towards the rostro-medial domain of the dermomyotome, where skeletal muscle formation initiates.