Transformation of nanocrystalline Mg(OH)(2) to MgO under dynamic vacuum in a temperature range of 570-770 K was studied by TGA-GCMS, FTIR, HREM, XRD, helium pycnometry, and nitrogen adsorption at 77 K. Several processes are shown to occur during transformation including: (a) release of compounds chemisorbed during preparation of nanocrystalline Mg(OH)(2) simultaneously with hydroxide-oxide transformation; (b) fragmentation of nanoparticles at temperatures lower than 670 K; and (c) re-crystallization and sintering of nanoparticles, whose mean size increases and relative number decreases rapidly with temperature above 670 K. A new phenomenon of decrease of the interlayer distance in MgO crystallites with increase of the nanoparticle size was observed.