Ultrasound-assisted direct energy deposition (UADED) attracts increasing attention due to its capability to tailor the grain structure. However, the involved molten pool dynamics, particularly the complex interaction of ultrasound-flow-solidification, remain unclear to date, which hinders quantitative prediction and regulation of the microstructures and mechanical properties of UADED components. Here, in situ high-speed imaging and high-fidelity multi-physics modeling are leveraged to investigate flow characteristics and liquid-to-solid transformation in UADED for Inconel 718. The inertial force activated by ultrasound is revealed to drive the molten pool to flow forward and backward along the vibration direction, resulting in poor surface quality. A hybrid deposition strategy is developed to minimize ultrasound-induced defects and produce superior microstructure with alternating coarse- and fine- grains. Such a layered microstructure results in 28% and 15% improvement in the yield strength and ultimate tensile strength compared to the counterpart by additive manufacturing without ultrasound. This work provides unprecedented understanding into the molten pool dynamics in the UADED process as well as valuable guidance to manipulate molten pool flow.