An understanding of magma chamber dynamics relies on answering three important yet highly controversial questions: where, why, and how magma chambers crystallize and differentiate. Here we report on a new natural phenomenon-the undercut-embayed chamber floor in the Bushveld Complex-which allows us to address these questions. The undercut-embayed floor is produced by magmatic karstification (i.e. erosion by dissolution) of the underlying cumulates by replenishing magmas that form basal flows on the chamber floor. This results in a few metres thick three-dimensional framework of spatially interconnected erosional remnants that separate the floor cumulates from the overlying resident melt. The basal flow in this environment is effectively cooled through the floor, inducing heterogeneous nucleation and in situ growth against much of its three-dimensional framework. The solidification front thus propagates in multiple directions from the surfaces of erosional remnants. Fractional crystallization may occur within this environment by convective removal of a compositional boundary layer from in situ growing crystals and is remarkably efficient even in very confined spaces. We propose that the way magma crystallizes and differentiates in the undercut-embayed chamber floor is likely common for the evolution of many basaltic magma chambers.