The nucleation, distribution and composition of erbium embedded in a SiO2-Si layer were studied with High Resolution Transmission Electron Microscopy (HRTEM), Electron Energy Loss Spectroscopy (EELS), Energy Filtered TEM (EFTEM), Scanning Transmission Electron Microscopy (STEM) and X-ray Photoelectron Spectroscopy (XPS). When the SiO2 layer contains small amounts of Si and Er, nanoclusters of Er-oxide are formed throughout the whole layer. Exposure of the oxide to an electron beam with 1.56*10 6 electrons/nm 2 /sec. causes nanocluster growth. Initially this growth matches the Ostwald ripening model, but eventually it stagnates at a constant nanocluster radius of 2.39 nm.PACS numbers: