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Though Alloy 718 is strengthened by γ″ precipitation, the nucleation of δ phase is used to stabilize grain size and also to improve its high temperature stress rupture properties. Large body of work has been reported in the literature on the precipitation of the γ″ phase. However, hardly very few reports are available on the evolution of δ particles in Alloy 718. The present paper reports the results of a detailed microstructural investigation carried out using Transmission Electron Microscopy (TEM) and Scanning Electron Microscopy (SEM) on the evolution of δ microstructure. Based on the SEM observations, three different mechanisms have been proposed for the generation of intersecting δ microstructure. In addition to the stacking faults in the matrix and γ″ particles acting as nuclei for δ phase formation, a new mechanism has been observed where the faults generated on the conjugate habit plane by dissociation of misfit dislocation on the interface of a δ variant acted as nuclei for another δ variant precipitation.