Detailed electron microscope observations of plastically deformed and annealed magnesium oxide have been made. After cold work the material contains trails of elongated prismatic dislocation loops, of which the majority corresponds to a sheet of interstitial ions. On annealing at temperatures between 850° and 1600°C these trails break up into circular loops of edge dislocation and the loops then increase in size. The process occurs by the motion of vacant lattice sites along dislocation lines and possibly through the bulk material. The kinetics of the former process is described. A theory of breakup by pipe diffusion has been developed and used to obtain an activation energy for the motion of point defects in the core of a dislocation of ∼3.1 ev.