The domain nucleation and growth during the switching process in ferroelectric PZT thin film capacitors was observed using atomic force microscope (AFM) technique combined with a lock-in amplifier. The measured phase difference between the tip vibration signal induced by the piezoelectric displacement and the low ac modulation voltage applied to the ferroelectric capacitor was used to determine the domain polarity whereas the tip vibration amplitude was used to determine the piezoelectric coefficient. As de bias field approached the coercive field, a rapid decrease of the amplitude was observed with a local phase reversal. This decrease of amplitude is probably due to the competition between the domains with opposite polarization, and the local phase reversal is attributed to the existence of preferential nucleation sites. The first regions with reversed polarization were observed at about 3.4 MV/m and the switching was completed at 5.5 MV/m.