Phase evolution of YBa 2 Cu 3 O 7−δ (YBCO) thin films prepared by a newly-developed fluorine-free sol–gel method were studied by combined use of in situ high temperature optical microscope observation and X-ray diffraction. The reaction sequences associated with yttrium, barium and copper in this route were determined respectively. It was found that the reactions that take place were strongly dependent on the experimental conditions such as water partial pressure. The formation of YBCO started around 710°C and continued up to 800°C for about 15min. The formation mechanism of YBCO was found to be dependent on the barium containing phases, which were controlled by the experimental conditions. The formation of a- and c-axes oriented YBCO grains was also found to be governed by the processing reactions.