The presence of water vapor in the annealing atmosphere during Ti:LiNbO3optical waveguide fabrication prevents Li out‐diffusion, inhibits LiNb3O8growth, and furthermore decomposes this phase if already formed. As a consequence, the TiO2and the mixed oxide (TixNb1−x)O2growth kinetics change. A proton in‐diffusion in LiNbO3with OH−defects and (Li1−yHy)NbO3molecule formation is suggested to explain these effects and to account for the detected increase of absorbance at 3480 cm−1.