The reduction reactions and densification of nanochains assembled from -FeO nanoparticles were investigated using transmission electron microscopy (TEM). Morphological changes and reduction of the metal oxide nanochains were observed during TEM annealing through simultaneous imaging and quantitative analysis of the near-edge fine structures of Fe L absorption edges acquired by spatially resolved electron energy loss spectroscopy. A change in the oxidation states during annealing of the iron oxide nanochains was observed with phase transformations due to continuous reduction from FeO over FeO, FeO to metallic Fe. Phase transitions during the heating experiments were accompanied with morphological changes in the nanochains, specifically rough-to-smooth surface transitions below 500 °C, neck formation between adjacent particles around 500 °C, and subsequent neck growth. At higher temperatures, coalescence of FeO particles was observed, representing densification.