Room temperature electron irradiation in aqueous environment is applied to CeO2 nanoparticles using a transmission electron microscope equipped with liquid environmental cell. Oxide dissolution kinetics become accessible at unprecedented scale of spatial and time resolution through irradiation activation of water within a sub-μm size volume, allowing direct measurements of transformation rate and morphologies. Successful live-observation of the formation of nano-needles provides essential inside in how 1D-nanostructures can form. Furthermore, formation of hydrogen bubbles is found and interpreted in relation to the dose needed for ceria dissolution. The results are of importance for many research applications of ceria in water, e.g. for catalysis, environmental remediation, biomedical radiation protection, anti-corrosion coatings, and ultimately via analogy to UO2 also for fission-power fuel engineering and waste disposal.