Giardia lamblia is the most prevalent protistan parasite, causing acute and chronic diarrheal disease in over one billion people worldwide. Vertebrate hosts ingest Giardia cysts from contaminated sources, and these cysts excyst in the gut to become motile trophozoites. Trophozoites colonize the small intestine by attaching to the intestinal villi and later differentiate into infectious cysts that are released into the environment, completing the parasite life cycle. Due to the limited accessibility of the gastrointestinal tract, our understanding of in vivo temporal and spatial dynamics of giardiasis is largely inferred from parasite physiology in laboratory culture. Yet parasite growth under in vitro culture conditions may not mirror in vivo parasite physiology in the host. Here we develop bioluminescent imaging (BLI) methods to directly interrogate the temporal and spatial dynamics of giardiasis in mice, providing an improved animal model for the evaluation of anti-Giardia drugs. This non-invasive method of imaging giardiasis allows unprecedented and precise quantification of in vivo temporal and spatial patterns of infection. By infecting mice with parasites expressing constitutive or encystation-specific luciferase bioreporters, we show that parasite colonization of the gut is not uniform. Metabolically active parasites primarily colonize the proximal small intestine in hot spots - high density foci of infection that likely result in localized pathology to the gut epithelium. Using in vivo and ex vivo BLI of encystation-specific bioreporters, we show that encystation initiates shortly after inoculation and parasites encyst throughout the entire duration of infection. We also find that encystation is initiated in high density foci in the proximal small intestine, rather than the colon as has been previously assumed, and show that the initiation of encystation is magnified in parasites incubated at high density in laboratory culture. Prior models have suggested that chemical cues cause parasites to encyst as they are dislodged from the upper gut and travel to more distal regions of the gastrointestinal tract. We suggest a model of encystation in which parasites reach a threshold density that results the induction of encystation due to local nutrient depletion. The in vivo imaging of giardiasis has redefined the dynamics of the Giardia life cycle in the host, paving the way for future mechanistic studies of density-dependent processes in this highly prevalent, yet understudied parasite.