Using low-energy electron microscopy, we have observed a reversible transition in the shape of Pb adatom and vacancy islands on Cu(111). With increasing temperature, circular islands become elongated in one direction. In previous work we have shown that surface stress domain patterns are observed in this system with a characteristic feature size which decreases with increasing temperature. We show that the island shape transition occurs when the ratio of the island size to this characteristic feature size reaches a particular value. The observed critical ratio matches the value expected from stress domains.