A real-time in situ study of the initial stages of the interaction of oxygen with Ni(111) in a high temperature scanning tunneling microscope (STM) at temperatures between 400 and 470 K is presented. Oxygen adsorption features, in particular the Ni(111)-p(2X2)O reconstruction, were identified in room temperature STM images. The process of oxide formation is investigated in detail at 470 K. Starting from the initial nucleation at the step edges, a gradual transformation of the terrace structure results in the formation of a three-domain NiO(001) layer finally covering: the entire terraces as well as forming bulges at the steps due to surface diffusion of excess Ni. Well-resolved local oxide surface structures are discussed on the basis of a thin (001)-oriented NiO layer model on the Ni(111) substrate. Formation of triangular bulk NiO(111) islands is observed for higher oxygen exposures above 25 L.