We study the formation of bismuth oxide hollow nanoparticles by the Kirkendall effect using liquid cell transmission electron microscopy (TEM). Rich dynamics of bismuth diffusion through the bismuth oxide shell have been captured in situ. The diffusion coefficient of bismuth through bismuth oxide shell is 3-4 orders of magnitude higher than that of bulk. Observation reveals that defects, temperature, sizes of the particles, and so forth can affect the diffusion of reactive species and modify the kinetics of the hollowing process.