MXenes are a group of two-dimensional transition metal carbides/nitrides that have been widely used for many useful applications such as energy storage, catalysis and sensors. For large scale applications of MXenes, the ambient stability is a critical issue. However, the detailed degradation mechanism of MXenes remains largely unclear. Here, the oxidation mechanism of MXene flakes under ambient conditions has been studied using aberration corrected scanning transmission electron microscopy (STEM). The heterogeneous growth of titanium oxide has been observed in the vicinity of atomic defects on the MXene basal plane as well as on the edges of MXene flakes. C atoms are oxidized at Ti-vacancies to form amorphous carbon aggregations, while Ti cations are oxidized at the nearby sites with atomic steps/edges. The diffusion of both electrons and Ti cations is involved and the Ti-ion diffusion is prompted by an internal electric field intrinsically built up during oxidation. The anatase TiO₂ nanoparticles preferentially grow along the {101} lattice plane. A loose orientation relationship between the anatase TiO₂ and MXene was identified, showing that mostly the {101} plane of TiO₂ nanocrystals is perpendicular to the Ti₃C₂-MXene {0001} basal plane. This work reveals at atomic resolution the oxidation mechanism of MXenes under ambient conditions and will shed light on the design and synthesis of more stable MXenes. It may also provide insights to develop a one-step method to synthesize hybrid structures of carbon supported TiO₂ nanoparticles for future large scale applications.