Solid phase crystallization offers an attractive route to synthesize Ni nanoparticles on a La2O3 support. These materials have shown great promise as catalysts for methane oxidation and similar reactions. Synthesis is achieved by the reduction of a LaNiO3 (LNO) precursor at high temperatures, but the reduction pathway can follow a variety of routes. Optimization of catalytic properties such as the long-term stability has been held back by a lack of understanding of the factors impacting the reduction pathway, and its strong influence on the structure of the resulting Ni/La2O3 catalyst. Here we show the first evidence of the importance of extended structural defects in the LNO precursor material (2D stacking faults and 3D inclusions) for determining the reaction pathway and therefore the properties of the final catalyst. Here we compare the crystallization of LNO nanoparticles via two different pathways using in-situ STEM, in-situ synchrotron XRD, and DFT electronic structure calculations. Control of extended defects is shown to be a key microstructure component for improving catalyst lifetimes.