Silicon is a high-capacity anode material, yet its scalable production from sustainable precursors requires low-temperature and controllable synthesis routes. Diatom-derived SiO₂ provides an abundant biogenic feedstock, but its conversion to silicon by magnesiothermic reduction (MgTR), typically conducted at 600–900 °C, is limited by the highly exothermic nature of the reaction, which induces local overheating, promotes side-phase formation, and often results in incomplete SiO₂ reduction. Here, we elucidate the reaction pathway of AlCl₃-assisted MgTR as a strategy to decrease synthesis temperature and improve reduction efficiency. By correlating the heating ramp rate, isothermal hold time, and salt-to-silica ratio with phase evolution and the crystalline silicon fraction, we identify the parameters governing oxygen abstraction and Si formation. Time-resolved in situ synchrotron X-ray diffraction provides direct insight into the reaction mechanism, revealing the early formation of metallic Al, the transient formation of MgAl₂Cl₈ as an intermediate, and the subsequent crystallization of Si concurrent with the consumption of metallic Al, thereby suggesting that Al acts as an effective reducing agent. Silicon formation proceeds within a chloride-rich molten phase and is achieved at temperatures as low as 250–300 °C. The crystalline silicon fraction is primarily dictated by heating conditions and AlCl₃ content, with optimized parameters maximizing the Si fraction while suppressing inactive byproducts. Electrochemical evaluation of the graphite-SiO_x electrode blends demonstrates enhanced reversible capacity relative to graphite together with moderate cycling stability, confirming the electrochemical activity of the synthesized material. Overall, this work unveils the mechanistic framework of AlCl₃-assisted MgTR and provides synthesis guidelines for the low-temperature conversion of diatom biosilica into silicon-based anode materials.