The oxyhalides have attracted growing interest because of their excellent photocatalytic performance. However, their structural instability hampers further development toward practical applications, a major challenge of current concerns. It is appealing to figure out the origin of structural instability and guide the design of advanced oxyhalide crystals for efficient photocatalysis. In this study, the decomposition of BiOCI crystals, a typical oxyhalide, is triggered by electron beam irradiation and investigated in situ by transmission electron microscopy. The results indicate that the instability originates from the unique layered structure of BiOCI crystals; the interlayer van der Waals bonds are easily broken under electron beam irradiation via the assistance of hydroxyl groups. This facilitates the formation of O/Cl-deficient BiO(1-x)CI(1-y)species, Bi metal nanoparticles, and nanobubbles (gaseous substance) that are confined between the adjacent layers. Surface reconstruction would be an effective way to stabilize the oxyhalide crystals.