Situation definition is the process and product of actors' interpretive activities toward a given situation. By reviewing a number of psychological studies conducted in experimental settings, we found that the studies have only explicated a part of the situation definition process and have neglected its dynamic aspects. We need to focus on the dynamic nature of the situation definition, which is constructed, maintained, and altered interactively. We characterize situation definition in terms of three dimensions. First, a variety of agents and objects shape the situation definition (multiple componentiality of situation definition). Second, various views concerning the situation definition coexist (heterogeneity in situation definitions). Third, the participants have equal responsibilities for defining the situation, usually with asymmetry of roles (co-construction of situation definition). To gain a holistic understanding of situation definition, we introduce the notion of fluctuation, which captures both the plasticity and the development of situation definition. We present observational data collected in a naturalistic setting to demonstrate fluctuations in situation definition. These fluctuations appeared in various forms, including a reversal of one situation definition to another, a deviation from the dominant situation definition, a restoration of the original situation definition, a parallel progression of multiple situation definitions, and a hybridization of multiple situation definitions. Specific shifts in activity, polysemy of objects, and conflicts and negotiations among participants over initiating the activity lead to the fluctuations in the situation definition.