We studied the mechanism of (RE)Ba2Cu3Oy phase formation via (RE)2BaO4 in the case of GdBa2Cu3Oy+40mol% Gd-211 combination, using mixture of Gd2BaO4, BaCuO2 and CuO. Pellets of this composite were sintered at various temperatures between 700°C and 1100°C and held for 1h in Ar (100%), Ar–1% O2, Ar–0.1% O2 atmospheres, then rapidly quenched in oil. The samples were characterized by XRD, SEM, and EPMA analyses. XRD and EPMA analyses indicated that Gd-123 phase forms at around 900°C but the temperature depends on the chosen atmosphere. The samples quenched from high temperatures (>1000°C) showed that final formation of a secondary phase depends on the temperature held before the quench.