The destruction and formation of equilibrium multidomain patterns in permalloy (Ni80Fe20) microsquares has been captured using pump-probe x-ray magnetic circular dichroism (XMCD) spectromicroscopy at a new full-field magnetic transmission soft x-ray microscopy endstation with subnanosecond time resolution. The movie sequences show the dynamic magnetization response to intense Oersted field pulses of approximately 200-ps root mean square (rms) duration and the magnetization reorganization to the ground-state domain configuration. The measurements display how a vortex flux-closure magnetization distribution emerges out of a nonequilibrium uniform single-domain state. During the destruction of the initial vortex pattern, we have traced the motion of the central vortex core that is ejected out of the microsquare at high velocities exceeding 1 km/s. A reproducible recovery into a defined final vortex state with stable chirality and polarity could be achieved. Using an additional external bias field, the transient reversal of the square magnetization direction could be monitored and consistently reproduced by micromagnetic simulations.