The growth mechanisms of the transition from polycrystalline NiSi to single-crystal NiSi2 have been investigated. Samples were prepared by depositing Ni on (100) Si substrates by ultra high vacuum electron-beam deposition followed by vacuum annealing to form a silicide. Experiments were carried out at the transition temperature of 750 degrees C for different annealing times. Rutherford backscattering spectroscopy (RBS), cross-sectional transmission electron microscopy (XTEM), scanning electron microscopy (SEM), Auger emission spectroscopy (AES) and X-ray diffraction (XRD) were employed with special emphasis placed on scanning and transmission electron microscopy. Cross-sectional examination in the transmission electron microscope reflects the coexistence of nickel monosilicide and nickel disilicide for samples annealed at 750 degrees C. Scanning electron microscopy shows interesting surface morphology of samples in which island-like NiSi2 growth takes place in an NiSi thin film. Grain boundaries in the initial and final stages of NiSi2 formation are characterized by holes which extend from the surface to the silicon substrate. A mechanism is proposed to account for these observations by involving the following: lattice diffusion of Ni into the Si substrate, the conversion of NiSi grains to NiSi2 via nucleation and diffusion processes and lateral grain growth resulting in accumulation of vacancies on grain boundaries resulting in holes.