Time-lapse scanning tunneling microscopy (STM) has been used to observe the oxygen induced reconstruction behavior of Ni(977), a stepped metallic surface. Previous studies using helium atom diffraction resolved the macroscopic kinetics for the reversible step-doubling and -singling of this vicinal surface. Sequential STM imaging recorded at elevated temperature has now elucidated atomic-level mechanistic details for the merging of steps in the presence of small amounts of adsorbed oxygen, less than 2% of a monolayer. Point contact between neighboring steps decorated with chemisorbed oxygen facilitates rapid step coalescence by means of zippering. An optimal oxygen concentration of step edge saturation was found to enable the step merging to proceed most rapidly. Excess oxygen was found to hinder the coalescence of neighboring steps through the possible growth of overlayer structures on the terraces. At sufficiently high temperatures, the surface is driven back to single steps due to oxygen dissolution. The departure of oxygen from the surface through dissolution, as well as the associated presence of oxygen in the selvedge region, may both play a role in destabilizing the double steps. Local step density influences the coalescence behavior by defining the number of available step edge sites. The microscopic details made available by time-resolved STM imaging illuminate some of the mechanistic steps related to the initial stages of metallic oxidation, and the sensitivity of surface morphological transformations to local surface structure and adsorbate coverage.