The carbothermal reduction of anatase in titanium oxycarbide was studied by transmission electron microscopy (TEM). This study emphasizes that the reaction proceeds through complex solid–gas equilibria involving three main steps. During the first step, the carbon-monoxide-enriched atmosphere prevailing within the furnace provokes the direct transformation of anatase into the Magnéli phase. This transformation is accompanied by abnormal oxide grain growth showing a high number of stacking defects. The ordering tendency of such defects and their progressive increasing density lead to the final Ti3O5 compound. The second step of the reaction concerns the destabilization of Ti3O5 and carbon black in a high pCO atmosphere to form the oxycarbide. The titanium oxycarbide (TixOyCz) nucleates in the carbon black aggregates, giving rise to a first generation of defect-free faceted crystals (automorphous habit) characterized by a constant chemical composition. During the third step, Ti3O5 is missing and the primary carbide enters a maturation step characterized by carbon enrichment, attested by an increase in its cell parameter. This third step is characterized by the recrystallization phenomenon of the primary oxycarbide into the secondary one with an abrupt change in stoichiometry. The latter is characterized by rounded crystals (xenomorphous habit) bearing either a high density of dislocations or geometrical internal porosity linked to the migration of vacancies through the Kirkendall effect. Its further enrichment in carbon is assumed to be assisted by dislocation motion.