The direct reduction of TiO2 to low-oxygen titanium metal is achievable via Hydrogen Assisted Magnesiothermic Reduction (HAMR). To investigate and leverage the oxygen-scavenging properties of rare-earth dopant species on the HAMR process, Y-doped and undoped TiO2 powders were synthesized and characterized. HAMR blends incorporating the synthesized TiO2 were reduced under forming gas atmospheres. X-ray powder diffraction (XRD) and scanning electron microscope (SEM) characterization was performed prior to and following reduction. The TiO2 powders were observed to be dense and nanocrystalline. Following reduction, more extensive development of intermediate HAMR phases was observed as a result of Y-doping. The microstructure/phase evolution of the HAMR reduction phases was observed to deviate from the expected for dense TiO2 particles. Rapid restructuring of the TiO2 particle interiors was attributed to increased bulk diffusion rates of nanocrystalline materials. Doped nanocrystalline TiO2 powders were identified as potential alternative feedstocks for HAMR experiments. The byproduct MgO phase was observed to grow as a particle agglomerating network that is dense when formed at 750 °C and porous when formed at 900 °C.