Open physical systems with balanced loss and gain, described by non-Hermitian parity-time ($mathcal{PT}$) reflection symmetric Hamiltonians, exhibit a transition which could engenders modes that exponentially decay or grow with time and thus spontaneously breaks the $mathcal{PT}$-symmetry. Such $mathcal{PT}$-symmetry breaking transitions have attracted many interests because of their extraordinary behaviors and functionalities absent in closed systems. Here we report on the observation of $mathcal{PT}$-symmetry breaking transitions by engineering time-periodic dissipation and coupling, which are realized through state-dependent atom loss in an optical dipole trap of ultracold $^6$Li atoms. Comparing with a single transition appearing for static dissipation, the time-periodic counterpart undergoes $mathcal{PT}$-symmetry breaking and restoring transitions at vanishingly small dissipation strength in both single and multiphoton transition domains, revealing rich phase structures associated to a Floquet open system. The results enable ultracold atoms to be a versatile tool for studying $mathcal{PT}$-symmetric quantum systems.
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