The physical stability and solid‐state recrystallization of spray‐dried ‘amorphous’ lactose particles were visualized using environmentally controlled atomic force microscopy (EC‐AFM) and conventional optical microscopy. The morphology and crystalline state were investigated as a function of relative humidity (RH) and were correlated with bulk gravimetric vapor sorption measurements that were run in parallel. The metastable nature of amorphous spray‐dried lactose particles was apparent at low RHs (<30% RH). Visualization of the recrystallization transformation of amorphous lactose during moisture uptake at 58 and 75% RH suggested only a proportion of the collapsed particles undergoes nucleation and crystal growth. The irregular surface morphology of the recrystallized particles suggested a secondary nucleation and growth process. Primary nucleation of α‐lactose monohydrate within the non‐recrystallized particles required exposure to elevated RH (94% RH). In relation to bulk measurements of moisture‐induced amorphous recrystallization of spray‐dried lactose, the results suggest that recrystallization of amorphous lactose, above a critical RH, may be induced by the presence of very low levels of a seed material, which may dramatically reduce the activation energy barrier for nucleation and crystal growth.