  We present a morphological study of the galaxy population of the luminous
X-ray cluster MS1054-03 at z=0.83. The sample consists of 81 spectroscopically
confirmed cluster members in a 3 x 2 Mpc area imaged in F606W and F814W with
WFPC2. We find thirteen ongoing mergers in MS1054-03, comprising 17% of the L >
L* cluster population. Most of these mergers will likely evolve into luminous
(\sim 2 L*) elliptical galaxies, and some may evolve into S0 galaxies. Assuming
the galaxy population in MS1054-03 is typical for its redshift it is estimated
that \sim 50% of present-day cluster ellipticals experienced a major merger at
z < 1. The mergers are preferentially found in the outskirts of the cluster,
and probably occur in small infalling clumps. Morphologies, spectra, and colors
of the mergers show that their progenitors were typically E/S0s or early-type
spirals with mean stellar formation redshifts z* \gtrsim 1.7. The red colors of
the merger remnants are consistent with the low scatter in the color-magnitude
relation in rich clusters at lower redshift. The discovery of a high fraction
of mergers in this young cluster is direct evidence against formation of
ellipticals in a single ``monolithic'' collapse at high redshift, and in
qualitative agreement with predictions of hierarchical models for structure
formation.
