Irradiation of gold films with Xe ions in the energy range 50–400 keV has been monitored using in situ transmission electron microscopy. Craters are produced and annihilated on the irradiated surface at all ion energies studied. Approximately 2–5% of impinging ions in the energy range 50–400 keV produce craters with sizes as large as 12 nm for the higher-energy irradiations. Crater annihilation occurs in discrete steps, due to subsequent ion impacts, or by annealing in a continuous manner due to surface diffusion processes. Crater creation results from flow associated with near surface cascades. Discrete crater annihilation results from plastic flow induced by ion impacts, including those that do not themselves leave a crater, and annealing that may occur during the quenching phase of cascade thermal spikes.