The nanostructure and phase evolution in low-temperature oxidized (40-250 °C), fine UO2 powders (<200 nm) have been investigated by X-ray diffraction (XRD) and high-resolution transmission electron microscopy (HR-TEM). The extent of oxidation was also measured via in situ thermogravimetric analysis. The oxidation of fine powders was found to proceed differently as compared to oxidation of coarse-grained UO2. No discrete surface oxide layer was observed and no U3O8 was formed, despite the high degree of oxidation (up to O/U = 2.45). Instead, nanosized (5-15 nm) amorphous nuclei (interpreted as amorphous UO3), unmodulated and modulated U4O9, and a continuous range of U3O7-z phases with varying tetragonal distortion (c/a > 1) were observed. Oxidation involves formation of higher uranium oxides in nanodomains near the grain surface which, initially, have a disordered defect structure ("disordered U4O9"). As oxidation progresses, domain growth increases and the long-period modulated structure of U4O9 develops ("ordered U4O9"). A similar mechanism is understood to happen also in U3O7-z.