The growth and phase transformation in the nanocrystalline titania powders were studied using TEM and X-ray diffraction. Titania particles consisting of anatase phase grow through coalescence. After a nucleus of rutile is formed, it grows at the expense of the nearest anatase particles. A nucleus of rutile is formed in two ways. The nucleation of rutile occurs at the amorphous interface between the small anatase particles. In a large anatase particle, the martensitic transformation is dominant. It is estimated that these two kinds of phase transformation mechanisms are controlled by the intrinsic and extrinsic defects. A rutile particle has the low-energy surfaces with a lot of terraces. The growth direction of a rutile particle is related to the orientation of twin. A rutile particle grows along a < 1 (2) over bar1 > direction on the {101}- twin plane.