Photochromic oxygen-containing yttrium hydride has been synthesized using a two step process. The process consists of an initial sputter deposition of oxygen-free yttrium hydride Y-x, followed by a controlled reaction with air that causes incorporation of oxygen into the material. An in-situ study of the YHx as it reacted with oxygen was made possible by applying an aluminium capping layer with a low but non-zero oxygen permeability prior to air exposure. During the reaction, the visual appearance of the YHx went from dark and opaque to transparent and yellowish. This transition was accredited incorporation of oxygen into the material, as shown through analysis with energy dispersive x-ray spectroscopy (EDS) and x-ray photoemission spectroscopy (XPS). Grazing incidence x-ray diffraction (GIXRD) studies revealed an fcc structure both before and after oxygen exposure, with a lattice parameter that increased from 5.2 to 5.4 angstrom during the reaction. With the lattice parameter in the oxygen free YHx, being equal to that reported earlier for YH2, our findings suggest that the non reacted YHx in this study is in-fact YH2.