The microstructure of titanium oxide thin films deposited by ion-assisted deposition was studied as a function of various process parameters such as the ratio of oxygen to argon in the ion beam, the ion/evaporant arrival ratio, and the substrate temperature. By changing the ratio of oxygen and argon ions, amorphous-like and different types of columnar microstructure could be induced in the films. The columnar microstructure was investigated by means of transmission and scanning electron microscopes. Crystal structures were investigated by x-ray diffraction and transmission electron microscopy. Growth models of columnar microstructure are proposed and the mechanism of columnar microstructure growth and the resulting optical properties are also discussed.