A time-resolved series of high-resolution transmission electron microscopy (HRTEM) images are used to monitor phase and morphology transformation of rod-like and spherical particles with the initial orthorhombic InOOH phase in situ under continuous illumination with high-energy electrons in a transmission electron microscope. For both particle types, the electron-beam irradiation induces a fast InOOH to rh-In₂O₃ decomposition accompanied by the formation of voids within the particle/rod center. After illumination time intervals of about 1-2 min (i.e. electron dose 6.3-12.6 × 10⁷ e nm^-2) for particles and 8 min (4.3 × 10⁸ e nm^-2) for rods, respectively, several small empty cavities become visible in the particle/rod center. The cavities coalesce and form a large hollow space/canal after further illumination. Time-resolved in situ HRTEM unambiguously shows that the formation of internal voids in both nanoparticle types is a consequence of the structural InOOH-to-rh-In₂O₃ phase transition that starts at the surface of the corresponding particle. The as-formed oxide phase encapsulates the untransformed hydroxylated phase. Its decomposition does not follow the Kirkendall mechanism; the matter transferred outwards is removed in the form of water, leading to void formation inside without an increase of the particle size.