Access to native protein structure depends on precise polypeptide folding and assembly pathways. Identifying folding missteps that may lead to the nearly 40 protein misfolding diseases could feature prominently in the development of intervention strategies. Accordingly, we have investigated the earliest steps of assembly by the folding nucleus of the Alzheimer's disease AB peptide with real-time imaging and fluorescence correlation spectroscopy. These analyses reveal the immediate formation of large micrometer size clusters maintaining properties of intermolecular molten globules. These dynamic unstructured aggregates serve as the nucleating sites for amyloid growth and, as with native protein folding, appear important for backbone desolvation. The resulting amyloid nucleus however is able to template monomer addition from solution at rates from 2K peptides/s at millimolar peptide concentrations. This direct observation of amyloid assembly unifies several divergent models that currently exist for protein misfolding.