The thermal decomposition of Mg-Al hydrotalcite and the subsequent reconstruction of the decomposed products in the presence of water vapor (2 vol. % H₂O in N₂) have been investigated by in situ XRD. Thermographic analysis and temperature-programmed desorption MS results complemented the diffraction data. Valuable mechanistic and kinetic insights into these processes, which are of prime importance for optimal activation of this type of material for catalytic applications, were obtained. Hydrotalcite decomposition to the mixed oxide proceeds via formation at 423-473 K of an intermediate phase, consisting of a highly disordered, dehydrated, layered structure. The latter evolves by removal of interlayer water on heating, causing a shrinking of the interlayer space (it is up to 45 % smaller than in the as-synthesized hydrotalcite). Above 623 K, Mg(Al)O_x oxide with the periclase structure is formed. Reversion of the intermediate dehydrated structure to hydrotalcite upon contact with water vapor is complete and very fast at room temperature. Recovery of hydrotalcite from the oxide calcined at 723 K is two orders of magnitude slower than rehydration of the intermediate layered structure and one order of magnitude slower than the typically practiced liquid-phase reconstruction. In contrast to the decomposition, the reconstruction mechanism does not involve an intermediate phase. The gas-phase rehydration and reconstruction was interrupted above 303 K. This is attributed to the poor wetting of the surface of the decomposed materials induced by hampered H₂O adsorption above room temperature at the water vapor pressure applied. The Avrami-Erofeev model describes the reconstruction kinetics well.