A driving force behind the development of ultrafast electron crystallography and microscopy is the recognition that there are a broad range of phase change materials that respond to photoexcitation in unusual pathways compared to those responding to applying pressure, heat, and chemical doping. Since the morphology of the nanomaterials play a role in determining their optical responses, the ability to resolve atomic structure and the transient dynamics that lead to various phase change states are crucial for these studies[1]. First, we will discuss the recent progress at MSU of using ultrafast electron crystallography and related methods to investigate nanomaterial assemblies[2]. We show that the dynamical responses of materials to a short-pulse (fs) laser excitation are multisphased, involving progressive transformations, from the initial femtosecond electronic excitation to ps and ns structural changes. In the study of the optically induced fragmentation of Ag nanocrystals excited at surface plasmon resonance, we find that the dominant dynamical feature in the prefragmentation stage is a defect-mediated instability growth, creating sub-nanocrystalline domains with hot surface and relatively cold core, based on diffraction refinements using a large supercell model[2], as shown in Fig. 1. From the defect density growth process, we suggest that the fragementaion is percolative, starting from valence modification as evidenced by creating topological defects, which are initially seeded in Ag through the strong nonlinear coupling between SPR and interband transition, causing chemical bonds to rupture. These defects will later percolates into larger stripes, thus causing the nanoparticles to fracture. Such creation and growth of topological defects, which can persist on the phonon timescales, could be common in nonequilibrium photoinduced structural phase transition. Further improving the temporal resolution to the phonon timescale (10-100fs) will allow more definitive traces of the initial nonlinear photoassisted electron-phonon coupling that seeds the reactions to be resolved.