Selected frames from Video 7 showing hierarchical membrane structures of POPC:SM:Ch (2:2:1) GUVs labeled with 0.5% SM-Atto647N (pseudo-colored green), encapsulating 1 M sucrose, submerged in MilliQ water at 25°C. In panel (A), we define the entrapping mother vesicle as M and daughter vesicle of interest as D. Both M and D initially exhibit homogenous fluorescence from their membranes, but store different amounts of tension (M is flaccid, while D appears tense). (B) The homogeneous fluorescence from D is replaced by the appearance of optically resolved domains. In the meantime, M becomes more spherical. (C) The domains of D have increased in size, and M has now reached an almost spherical shape. (D) Expulsion of the tense D vesicle. This image acquired during a transient pore formation suggests that the intravesicular pressure and/or crowding is reduced via preferential expulsion of daughter. This event, we surmise, also delays the onset of domain formation by reducing the swelling of the M vesicle. (E) M is returned to a flaccid state, remaining homogenously fluorescent, consistent with the reduction in swelling and a reduction of osmotic pressure. At the same time, D experiencing a new hypotonic medium gets engaged in swell–burst cycles. (F) Further inflation of GUVs leads to M adopting a tense spherical configuration, while yet retaining homogenously fluorescent state, while D's domain sizes continue to grow. (G) The continued swelling of M finally leads to phase separation. (H) Domains in M disappear producing homogeneous state, consistent with the oscillatory phase separation under osmotically generated tension. Panels correspond to (A–H) 0 s, 6 s, 14 s, 18 s, 20 s, 62 s, 103 s, and 118 s. Scale bar: 10 µm.