The non‐equilibrium precipitation morphology is considered. A new mechanism is suggested whereby rod‐like precipitates are formed as a result of the local plastic deformation of the matrix due to the volume change during precipitation. The mechanism includes three elements: (i) the generation of a set of prismatic dislocation loops and their movement along the slip vector, (ii) the secondary nucleation on the loops, and (iii) the subsequent coagulation of the microprecipitates giving rise to rods with fixed orientations parallel to the operative slip direction. Microscopic evidence indicates that the proposed mechanism does operate when NiCl2 particles are precipitated in NaCl crystals at a relatively high supersaturation.