We describe the conversion of yttrium, barium, and copper trifluoracetate-derived solid precursors to epitaxial YBa2Cu3Ox superconducting ceramics on (001)-oriented LaAlO3 substrates. Transmission electron microscopy, electron energy loss spectroscopy, energy-dispersive X-ray analysis, and X-ray diffraction are used to characterize the reaction path and nucleation mechanism yielding high critical current YBa2Cu3O7. Our results show that the pyrolysis of the trifluoracetate solutions yields a nanostructured, partially amorphous Ba1-xYxF2+x matrix having a Ba/Y ratio close to 2, with homogeneously dispersed CuO nanoparticles. Upon heating, the chemical trajectory of the fluoride matrix and the overall microstructural evolution of the ceramic precursor prior to YBa2Cu3O7 nucleation is driven by the decomposition and oxidation of this solid solution. The Y solid solubility decreases with temperature yielding Y2O3 which reacts with the CuO particles forming Y2Cu2O5 at about 700 °C. In addition, electron energy loss spectroscopy reveals a high oxygen concentration and almost no Y in the matrix quenched from 795 °C, at a stage where the YBa2Cu3Ox phase still forms disconnected 50−100 nm thick islands spaced by 1−2 μm. The observed evolution from Ba1-xYxF2+x to a barium oxyfluoride mostly occurs prior to the heteroepitaxial nucleation of YBa2Cu3Ox at about 700 °C. Hence, a microstructural scenario is defined which favors competitive nucleation growth between heteroepitaxial YBa2Cu3Ox and bulk Y2Cu2O5. X-ray diffraction pole-figure analysis reveals that the oxyfluoride phase is heavily textured, exhibiting two epitaxial relationships with the (001)-LaAlO3 substrate: (001)OF//(001)LaAlO3, [110]OF//[100]LaAlO3 and (111)OF//(001)LaAlO3, [110]OF//[100]LaAlO3 (OF stands for oxyfluoride). High-resolution observations of the growth front support that (111)-oriented oxyfluoride regions provide low-barrier nucleation sites for c-axis-oriented YBa2Cu3Ox on the buried (001)-LaAlO3 substrate. However, owing to its high mismatch, this orientation only represents roughly 15% percent of the total OF volume. Considering that the nucleation of YBa2Cu3Ox is confined to those regions, this would lead to an anomalously large internuclei spacing, as is indeed observed, favoring the formation of large YBa2Cu3Ox grains and films with a low mosaic spread.