This study explores the microstructural characteristics of gadolinium (Gd)-rich phases in titanium (Ti) alloys through comprehensive electron microscopy analysis. The Ti alloys were produced using plasma arc melting and subsequently hot-forged. Elaborate material characterization, including scanning electron microscopy, electron backscatter diffraction, and energy dispersive spectroscopy, revealed the formation of round or angular Gd oxides and elongated Gd-rich grains within the alloy. High-magnification transmission electron microscopy and X-ray diffraction confirmed the presence of the FCC-type γ-Gd phase, influenced by the oxygen intake during casting, coexisting with Gd2O3 due to their similar crystal structures. The study also observed internal twins in the Gd grains, potentially delaying the transformation to the stable α-Gd phase. The significant mechanical property differences between the Gd-rich phases and the Ti matrix caused defects at phase interfaces during hot processing, weakening the Gd phase. This work enhances the understanding of Gd phase formation and its implications on the mechanical properties of Ti–Gd alloys.