The effect of isothermal annealing (1000 hours at 560 °C and 625 °C in the air) on the deformation behavior of a heat-resistant titanium alloy VT18U has been studied. The structure of the oxygen-enriched layer in the samples was studied using X-ray diffraction, optical and electron microscopy, and microhardness measurement. After annealing, the tensile ductility of the alloy at room temperature decreases from 14% to 5%. Depth of the oxygen-enriched layer in the oxidized samples increases from 17 μm after annealing at 560 °C to 42 μm after annealing at 625 °C. The main factor determining ductility of the alloy VT18U in the oxidized state is a gradient of oxygen concentration in the oxygen-enriched layer.