The free energy change associated with the omega transformation is described using a Born-von Karman anharmonic planar lattice model. It is shown that a dual-phase long period structure consisting of omega and beta (b.c.c.) can be developed immediately below the transformation temperature, Tω. This structure is stabilized by the “competition” in κ-space between second and third-order interplanar force constants. The third-order free energy, which drives the reaction, favors a displacement modulation having the omega wave vector kω, whereas the second-order (harmonic) energy favors a slightly larger wave vector K m . The spacing ( d ω ) of the omega particles in the dual-phase structure is shown as the result of a “phonon flipping” mechanism to be given by d ω = π (k m − k ω) . As the temperature ( T) is decreased below ( T ω ) the volume fraction of omega increases and the wave vector of the omega peak shifts gradually from k m to k ω . On reaching k ω , the stable structure is single phase omega. A number of the features predicted by this model for the transformation are in agreement with reported experimental observations; 1. (i) the first-order nature of the reaction, 2. (ii) the static-phonon structure above the transformation temperature, 3. (iii) the offset of the diffuse omega peak and its shift on cooling, 4. (iv) the 25 Å particle spacing, and 5. (v) the athermal characteristics of the transformation.