This investigation presents the results of the reduction-nitridation of boric anhydride (B2O3) in the nitrogen, nitrogen-hydrogen and nitrogen plus ammonia atmospheres for understanding the mechanism of boron nitride reaction. The effect of time on the reduction-nitridation reaction was studied at several preselected isotherms chosen between 1373 and 1773 K. The role of reaction parameters such as temperature, time and gas composition on the phase composition and microstructure is examined. In particular, the structural and stereochemical significance of BN-phase nucleation promoter in determining the crystallinity of h-BN phase is discussed. The importance of the sub-oxide BO gas in facilitating the formation of nanometre-size BN-phase is also explained. The relevance of the gas-solid phase equilibria in determining the stability of boron carbide phase is emphasized. The selected area electron diffraction analysis strongly hints to the evidence for a boron carbonitride phase (B4C1-XNx). On the basis of our experimental findings, the significance of single-pellet study for h-BN powder manufacturing is also discussed in terms of the concepts for a reactor design.