This paper describes the crystallochemical mechanisms that underpin the migration of nano-size alumina, intermetallic growth and phase transformations in Au–Al wire bonds during annealing from 175°C to 250°C by utilizing high-resolution transmission electron microscopy (HRTEM). Alumina, encapsulated within the Au–Al intermetallic compounds (IMCs), migrates towards the Au ball during annealing, with Au diffusion into the Al pad. The sequence of Au–Al IMC phase development during annealing was investigated. Initially, Au8Al3 appears as a third phase between the Au4Al and AuAl2 layers that form during bonding, and gradually becomes the dominant compound. Both AuAl2 and Au8Al3 are transformed into the Au-rich alloyAu4Al when Al is completely consumed, and this is the terminal product.