Multiple beam interferometry and video microscopy were used to investigate the layering transition of thin liquid films of 1-undecanol confined between atomically smooth mica surfaces. The expulsion of a molecularly thin lubricant layer was followed directly in two dimensions. Overall, the dynamics of the transition follows theoretical predictions based on two-dimensional hydrodynamics. Frequently, pockets of liquid remain trapped inside the contact area at the end of the transition. The trapped pockets undergo shape transformations to minimize elastic and interfacial energy.