The thermal stability of highly oriented homogeneous poly(ethylene-co-1-octene) (h-PEO) fiber during annealing process was carefully studied by time-resolved two-dimensional wide-angle X-ray diffraction (WAXD) pattern. The experimental results show that three phases exist in h-PEO fiber, orthorhombic crystal phase, pseudo-hexagonal mesophase, and amorphous phase, which are stable at room temperature. As soon as the fiber is heated, the mesophase transforms to orthorhombic crystal phase. This transformation kinetics was analyzed in terms of Avrami phase transformation theory. The Avrami index was found to be 1, indicating one-dimensional growth. This can be explained by the bundle-like crystal morphology existing in h-PEO.