Hydrogen sorption performances of TiFe are very sensitive to the preparation conditions, especially ones which result in contamination of the material with oxygen. In this paper the effect of oxygen introduction (<= 1 wt.%) on phase composition of TiFe alloy was investigated. It was observed that the increase of oxygen content in the alloy results in the decrease of the abundance of the main TiFe phase, together with the increase in the abundance of the mixed suboxide, Ti4Fe2O1-x. The observed effect was quantified in terms of the balance of the reaction of TiFe with oxygen to yield Ti4Fe2O1-x and TiFe2. In addition, a comparison of hydrogen sorption performances of arc-melted TiFe(0) and sintered Ti1.1Fe0.9Ox was carried out. It was shown that the introduction of oxygen improves activation performances of the TiFe based material, but decreases its reversible hydrogen absorption capacity because of: (i) decrease of fraction of TiFe intermetallide in the material interacting with oxygen to yield Ti4Fe2O1-x and TiFe2; (ii) formation of stable hydrides on the basis of Ti4Fe2O1-x mixed suboxide and titanium hydride, if titanium is taken in the excess; and (iii) destabilisation of both beta-TiFeH and, especially, gamma-TiFeH2. The observed features should be taken into account in industrial-scale processes for the manufacturing of TiFe to assure a good quality of the final product which may contain oxygen, but in the amount below 0.2 wt.%. Copyright (c) 2012, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.