Atomic level processes involved in the swelling and crack-closing in nuclear grade graphite under electron irradiation have been observed in real-time using transmission electron microscopy. Noise-filtered lattice images show the formation of vacancy loops, interstitial loops and resulting dislocations with unprecedented clarity. The dislocation dipoles formed via vacancy loops were found to undergo climb resulting in extra basal planes. Concurrent EELS studies showed a reduction in the atomic density because of the breakage of hexagonal carbon rings. The formation of new basal planes via dislocation climb in addition to the bending/breaking of basal planes leads to swelling and closing of micro-cracks.