The transformation of 2¯01β-Ga2O3 to h-GaN under exposure to RF nitrogen plasma was monitored in situ by reflection high-energy electron diffraction. Analysis of the reaction kinetics reveals that the nitridation process is initiated by the formation of an oxynitride phase and proceeds via two-dimensional nucleation and growth of wurtzite GaN grains. X-ray photoelectron spectra suggest a Ga−(NxO1−x) type configuration dominates the surface early in the nitridation process. The surface restructuring is followed by a diffusion-fed phase transformation, which propagates the wurzite GaN structure into the substrate upon reaching 70% nitrogen anion site occupation, corresponding to the oxygen solubility in h-GaN. A direct correlation is observed between the nitridated film morphology and the epitaxial film crystallinity, demonstrating control of the residual strain, lateral coherence, and mosaicity in subsequent GaN epitaxy by the nitridation conditions. This study provides mechanistic details of the nitridation reaction of 2¯01β-Ga2O3 facilitating the optimization of the nitridation process toward improving GaN-2¯01β-Ga2O3 heterojunctions.