Thin films of MgFe2O4 spinel on a (001) substrate of MgO have been heated to elevated temperatures in an applied electric field. The externally applied electric field produces a large driving force that influences the kinetic behavior of the spinel film and results in the formation of an MgO layer at the cathode due to the higher mobility of the Mg2+ cations in the spinel. Through the use of both scanning and transmission electron microscopy, the evolution of this layer was followed through a series of heat treatments. Analysis of the decomposition process shows that initially isolated pockets of MgO form at the cathode surface. These pockets grow and eventually coalesce to form a continuous MgO layer. The two MgO/spinel heterojunctions behave differently since one is morphologically stable while the other is morphologically unstable. TEM analysis showed that during the decomposition process, dislocation loops are formed in the vicinity of the MgO pockets. It is proposed that these dislocation loops form to accommodate the lattice misfit at the interface between the precipitating MgO and spinel.