AbstractWe describe briefly the Palomar‐Quest (PQ) digital synoptic sky survey, including its parameters, data processing, status, and plans. Exploration of the time domain is now the central scientific and technological focus of the survey. To this end, we have developed a real‐time pipeline for detection of transient sources.We describe some of the early results, and lessons learned which may be useful for other, similar projects, and time‐domain astronomy in general. Finally, we discuss some issues and challenges posed by the real‐time analysis and scientific exploitation of massive data streams from modern synoptic sky surveys. (© 2008 WILEY‐VCH Verlag GmbH & Co. KGaA, Weinheim)