Precipitation of lossy non-superconducting niobium hydrides represents a known problem for high purity niobium in superconducting applications. Using cryogenic optical and laser confocal scanning microscopy, we have directly observed surface precipitation and evolution of niobium hydrides in samples after different treatments used for superconducting RF cavities for particle acceleration. Precipitation is shown to occur throughout the sample volume, and the growth of hydrides is well described by the fast diffusion-controlled process in which almost all hydrogen is precipitated at T = 140 K within ∼30 min. 120 °C baking and mechanical deformation are found to affect hydride precipitation through their influence on the number of nucleation and trapping centers.