In situ transmission electron microscopy (TEM) was used to investigate mechanisms of dielectric breakdown during the electric-field-assisted consolidation of nickel nanoparticles which possess an ultrathin surface oxide layer. A constant positive bias was applied directly to isolated agglomerates of nickel nanoparticles during TEM observation. The evolution of the resulting leakage currents across the dielectric oxide films separating adjacent particles was analyzed. The formation of local conductive pathways between individual particles was observed with an electrical signature similar to that of time-dependent dielectric breakdown. Individual current increments with time occurred as a result of inter-particle neck formation initiated by dielectric breakdown and subsequent oxygen migration due to Joule heating. Neck formation and growth as well as particle rearrangements led to accelerated current increase through the particle agglomerate that gave rise to rapid densification. A quantitative analysis of the injected charges into the particle agglomerate suggests that neck formation has occurred once a critical charge density was obtained on the particle surfaces, i.e. commensurate with an increase in the local electrical field strength across individual dielectric oxide layers that separated the metallic particles.