We report the experimental observation of osmotically induced transient pearling instabilities in vesicular membranes. Giant phospholipid vesicles subjected to negative osmotic gradient, which drives the influx of water in to the vesicular interior, produces transient cylindrical protrusions. These protrusions exhibit a remarkable pearling intermediate, which facilitates their subsequent retraction. The pearling front propagates from the distal free end of the protrusion toward the vesicular source and accompanies gradual shortening of the protrusion via pearl-pearl coalescence. Real-time introduction of a positive osmotic gradient, on the other hand, drives vigorous shape fluctuations, which in turn produce cylindrical, prolate- and pear-shaped intermediates presumably due to an increased vesicular area relative to the encapsulated volume. These intermediates transiently produce a pearled state prior to their fission. In both cases, the transient pearling state gives rise to an array of stable spherical daughter vesicles, which may be connected to one another by fine tethers not resolved in our experiments. These results may have implications for self-reproduction in primitive, protein-free, cells.