Silicon- and oxygen-containing hydrogenated amorphous carbon (a-C:H:Si:O) coatings are amorphous thin-film materials composed of hydrogenated amorphous carbon (a-C:H), doped with silicon and oxygen. Compared to a-C:H, a-C:H:Si:O exhibits much lower susceptibility to oxidative degradation and higher thermal stability, making a-C:H:Si:O attractive for many applications. However, the physical mechanisms for this improved behavior are not understood. Here, the thermally induced structural evolution of a-C:H:Si:O was investigated in situ by X-ray photoelectron and absorption spectroscopy, as well as molecular dynamics (MD) simulations. The spectroscopy results indicate that upon high vacuum annealing, two thermally activated processes with a Gaussian distribution of activation energies with mean value E and standard deviation sigma take place in a-C:H:Si:O: (a) ordering and clustering of sp(2) carbon (E +/- sigma = 0.22 +/- 0.08 eV) and (b) conversion of sp(3)- to sp(2)-bonded carbon (E +/- sigma = 3.0 +/- 1.1 eV). The experimental results are in qualitative agreement with the outcomes of MD simulations performed using a ReaxFF potential. The MD simulations also indicate that the higher thermal stability of a-C:H:Si:O compared to a-C:H (with similar fraction of sp(2)-bonded carbon and hydrogen content) derives from the significantly lower fraction of strained carbon carbon sp(3) bonds in a-C:H:Si:O compared to a-C:H, which are more likely to break at elevated temperatures.