Lattice deformation is observed in nanocrystalline silicon synthesized by ion beam induced phase separation of SiOx films. The separation of silicon and silicon dioxide phases is achieved in the suboxide films after irradiation with a 100-MeV Ag beam. The interaction of a high-energy heavy ion beam with the material is dominated by an electronic energy loss process. A large amount of energy is deposited uniformly in the material through this process. Glancing angle X-ray diffraction (GAXRD), micro-Raman spectroscopy, high-resolution transmission electron microscopy (HRTEM), selected-area electron diffraction (SAED), and energy-dispersive X-ray spectroscopy (EDX) measurements were carried out. The results confirm the occurrence of phase separation in non-stoichiometric silicon oxide by means of ion-beam irradiation leading to the formation of silicon nanocrystals in the films. The lattice of silicon nanocrystals is found to be deformed (contracted). The X-ray diffraction studies and HRTEM studies reveal the occurrence of two different phases of silicon, viz. cubic (fcc) phase and high-pressure (contracted lattice) phase, simultaneously. The observations are explained on the basis of ion beam induced pressure and thermal spike in the ion track.