Erbium dihydride Er(H,D,T)2 is a fluorite structure rare-earth dihydride useful for the storage of hydrogen isotopes in the solid state. However, thermodynamic predictions indicate that erbium oxide formation will proceed readily during processing, which may detrimentally contaminate Er(H,D,T)2 films. In this work, transmission electron microscopy (TEM) techniques including energy-dispersive x-ray spectroscopy, energy-filtered TEM, selected area electron diffraction, and high-resolution TEM are used to examine the manifestation of oxygen contamination in ErD2 thin films. An oxide layer ∼30–130 nm thick was found on top of the underlying ErD2 film, and showed a cube-on-cube epitaxial orientation to the underlying ErD2. Electron diffraction confirmed the oxide layer to be Er2O3. While the majority of the film was observed to have the expected fluorite structure for ErD2, secondary diffraction spots suggested the possibility of either nanoscale oxide inclusions or hydrogen ordering. In situ heating experiments combined with electron diffraction ruled out the possibility of hydrogen ordering, so epitaxial oxide nanoinclusions within the ErD2 matrix are hypothesized. TEM techniques were applied to examine this oxide nanoinclusion hypothesis.