Monolayers of transition metal dichalcogenides (TMDs) are characterized by an extraordinarily strong Coulomb interaction giving rise to tightly bound excitons with binding energies of hundreds of meV. Excitons dominate the optical response as well as the ultrafast dynamics in TMDs. As a result, a microscopic understanding of exciton dynamics is the key for a technological application of these materials. In spite of this immense importance, elementary processes guiding the formation and relaxation of excitons after optical excitation of an electron-hole plasma has remained unexplored to a large extent. Here, we provide a fully quantum mechanical description of momentum- and energy-resolved exciton dynamics in monolayer molybdenum diselenide (MoSe2) including optical excitation, formation of excitons, radiative recombination as well as phonon-induced cascade-like relaxation down to the excitonic ground state. Based on the gained insights, we reveal experimentally measurable features in pump-probe spectra providing evidence for the exciton relaxation cascade.