Thermally induced structural transformation of 2D materials opens unique avenues for generating other 2D materials by physical methods. Imaging these transitions in real time provides insight into synthesis routes and property tuning. We have used in situ transmission electron microscopy (TEM) to follow thermally induced structural transformations in layered CoSe₂. Three transformation processes are observed: orthorhombic to cubic-CoSe₂, cubic-CoSe₂ to hexagonal-CoSe, and hexagonal to tetragonal-CoSe. In particular, the unit-cell-thick orthorhombic structure of CoSe₂ transforms into cubic-CoSe₂ via rearrangement of lattice atoms. Cubic-CoSe₂ transforms to hexagonal-CoSe at elevated temperatures through the removal of chalcogen atoms. All nanosheets transform to basal-plane-oriented hexagonal 2D CoSe. Finally, the hexagonal to tetragonal transformation in CoSe is a rapid process wherein the layered morphology of hexagonal-CoSe is broken and islands of tetragonal-CoSe are formed. Our results provide nanoscopic insights into the transformation processes of 2D CoSe₂ which can be used to generate these intriguing 2D materials and to tune their properties by modifying their structures for electro-catalytic and electronic applications.