An optimum route to synthesize Ti-Mo system powders is investigated by analyzing the effect of the heat treatment atmosphere on the formation of the reaction phase by dehydrogenation and hydrogen reduction of ball-milled TiH2-MoO3 powder mixtures. Homogeneous powder mixtures with refined particles are prepared by ball milling for 24 h. XRD analysis of the heat-treated powder in a hydrogen atmosphere shows TiH2 and MoO3 peaks in the initial powders as well as the peaks corresponding to the reaction phase species, such as TiH0.7, TiO, MoO2, Mo. In contrast, powder mixtures heated in an argon atmosphere are composed of Ti, TiO, Mo and MoO3 phases. The formation of reaction phases dependent on the atmosphere is explained by the partial pressure of H2 and the reaction temperature, based on thermodynamic considerations for the dehydrogenation reaction of TiH2 and the reduction behavior of MoO3.