Phase formation of sodium bismuth titanate (Na0.5Bi0.5TiO3 or NBT) and its solid solution with barium titanate (BaTiO3 or BT) during the calcination process is studied using in situ high-temperature diffraction. The reactant powders were mixed and heated to 1000 degrees C, while X-ray diffraction patterns were recorded continuously. Phase evolutions from starting materials to final perovskite products are observed, and different transient phases are identified. The formation mechanism of NBT and NBT-xBT perovskite structures is discussed, and a reaction sequence is suggested based on the observations. The in situ study leads to a new processing approach, which is the use of nano-TiO2, and gives insights to the particle size effect for solid-state synthesis products. It was found that the use of nano-TiO2 as reactant powder accelerates the synthesis process, decreases the formation of transient phases, and helps to obtain phase-pure products using a lower thermal budget.