Poly(N-isopropylacrylamide) microgels have found various uses in fundamental polymer and colloid science as well as in different applications. They are conveniently prepared by precipitation polymerization. In this reaction, radical polymerization and colloidal stabilization interact with each other to produce well-defined thermosensitive particles of narrow size distribution. However, the underlying mechanism of precipitation polymerization has not been fully understood. In particular, the crucial early stages of microgel formation have been poorly investigated so far. In this contribution, we have used small-angle neutron scattering in conjunction with a stopped-flow device to monitor the particle growth during precipitation polymerization in situ. The average particle volume growth is found to follow pseudo-first order kinetics, indicating that the polymerization rate is determined by the availability of the unreacted monomer, as the initiator concentration does not change considerably during the reaction. This is confirmed by calorimetric investigation of the polymerization process. Peroxide initiator-induced self-crosslinking of N-isopropylacrylamide and the use of the bifunctional crosslinker N,N'-methylenebisacrylamide are shown to decrease the particle number density in the batch. The results of the in situ small-angle neutron scattering measurements indicate that the particles form at an early stage in the reaction and their number density remains approximately the same thereafter. The overall reaction rate is found to be sensitive to monomer and initiator concentration in accordance with a radical solution polymerization mechanism, supporting the results from our earlier studies.