Two-dimensional melting is one of the most fascinating and poorly understood phase transitions in nature. Theoretical investigations often point to a two-step melting scenario involving unbinding of topological defects at two distinct temperatures. Here, we report on a novel melting transition of a charge-ordered K-Sn alloy monolayer on a silicon substrate. Melting starts with short-range positional fluctuations in the K sublattice while maintaining long-range order, followed by longer-range K diffusion over small domains, and ultimately resulting in a molten sublattice. Concomitantly, the charge order of the Sn host lattice collapses in a multistep process with both displacive and order-disorder transition characteristics. Our combined experimental and theoretical analysis provides a rare insight into the atomistic processes of a multistep melting transition of a two-dimensional materials system.