A new method that combines staggered grid Arbitrary Lagrangian-Eulerian (ALE) techniques with structured local adaptive mesh refinement (AMR) has been developed for solution of the Euler equations. The novel components of the combined ALE-AMR method hinge upon the integration of traditional AMR techniques with both staggered grid Lagrangian operators as well as elliptic relaxation operators on moving, deforming mesh hierarchies. Numerical examples demonstrate the utility of the method in performing detailed three-dimensional shock-driven instability calculations.