A new method for the solution of the unsteady Euler equations has been developed. The method combines staggered grid Lagrangian techniques with structured local adaptive mesh refinement (AMR). This method is a precursor to a more general adaptive arbitrary Lagrangian Eulerian (ALE-AMR) algorithm under development, which will facilitate the solution of problems currently at and beyond the boundary of soluble problems by traditional ALE methods by focusing computational resources where they are required. Many of the core issues involved in the development of the ALE-AMR method hinge upon the integration of AMR with a Lagrange step, which is the focus of the work described here. The novel components of the method are mainly driven by the need to reconcile traditional AMR techniques, which are typically employed on stationary meshes with cell-centered quantities, with the staggered grids and grid motion employed by Lagrangian methods. These new algorithmic components are first developed in one dimension and are then generalized to two dimensions. Solutions of several model problems involving shock hydrodynamics are presented and discussed.