Formation of titanium silicide islands by the coadsorption of titanium and oxygen on a Si(001) surface is studied by means of scanning tunneling microscopy. When the coverage of titanium is at 2 ML, subsequent oxygen exposure at 973 K produces defects preferentially near the titanium silicide islands. On the other hand, when the coverage of titanium is at around 0.1 ML, step morphology is largely changed by oxygen exposure and subsequent annealing to 873 K. This phenomenon does not change with the heating process when the oxidation precedes the titanium deposition or vice versa. Mechanism of the enhanced step-retreat process is attributed to the desorption of SiO species promoted by titanium silicide islands.