We present experimental and theoretical evidence of sequential redox processes and structural transformations occurring by increasing temperature in a metal/oxide/metal system obtained via deposition of Fe atoms onto a z'-TiO(1.25)/Pt(111) ultrathin film in UHV. The initial reduction of the z'-TiO(x) phase by Fe at room temperature is followed by Fe diffusion and partial penetration into the substrate at intermediate temperatures. This triggers the formation of a bi-component material in which mixed FeO/TiO(2) nanoislands coexist on a h-TiO(1.14) ultrathin film, notably restructured (from rectangular to hexagonal) and reduced (from Ti : O = 1 : 1.25 to 1 : 1.14) with respect to the original TiO(1.25) phase. Further heating recovers the pristine z'-TiO(x) phase while Fe completely dissolves into the substrate.