We report direct visualizations of the fluctuation and condensation phenomena in a phase transition of a one-dimensional (1D) In/Si(111) system using scanning tunneling microscopy. The high-temperature (HT) and low-temperature (LT) phases are found to coexist on the nanometer scale near T-c. Above T-c, 1D LT-phase stripes fluctuate in the HT phase and coalesce into 2D islands with decreasing temperature. They condense to make the LT phase below T-c. Small areas of the HT phase also exist below T-c. The observed temperature-dependent evolution of the nanoscale inhomogeneities is consistent with the theoretical predictions for a second-order phase transition.