Cancers contain a wide diversity of cell types that are defined by differentiation states, genetic mutations and altered epigenetic programmes that impart functional diversity to individual cells. Elevated tumour cell heterogeneity is linked with progression, therapy resistance and relapse. Yet, imaging of tumour cell heterogeneity and the hallmarks of cancer has been a technical and biological challenge. Here we develop optically clear immune-compromised rag2(E450fs) (casper) zebrafish for optimized cell transplantation and direct visualization of fluorescently labelled cancer cells at single-cell resolution. Tumour engraftment permits dynamic imaging of neovascularization, niche partitioning of tumour-propagating cells in embryonal rhabdomyosarcoma, emergence of clonal dominance in T-cell acute lymphoblastic leukaemia and tumour evolution resulting in elevated growth and metastasis in BRAF(V600E)-driven melanoma. Cell transplantation approaches using optically clear immune-compromised zebrafish provide unique opportunities to uncover biology underlying cancer and to dynamically visualize cancer processes at single-cell resolution in vivo.