We demonstrate experimentally a transition from nonlinear beam trapping to defocusing in a two-dimensional periodic photonic structures by varying the modulation depth of the lattice. The observed effect illustrates the fundamental crossover from discrete to cw transport mechanisms. At the threshold modulation, the output beam is highly sensitive to refractive index and power variations, which can be potentially applied for high-sensitivity refractive index or temperature sensing. © 2010 Optical Society of America OCIS codes: 190.5940, 190.6135, 190.0190. Self-action of light in nonlinear periodic structures is a rich physical phenomenon giving rise to a range of fundamental effects that can be observed only owing to the medium periodicity and have no analog in homogeneous systems. Periodic structures in optics introduce dramatic changes in the linear wave spectrum through the appearance of photonic bandgaps and subsequent qualitative and quantitative modification of wave transport [1]. These features furthermore have a dramatic effect on