Recently, we reported detailed investigations on a hydrolysis step of Cu–Cl thermochemical cycle (Singh et al. in Int J Energy Res 44:2845–2863, 2020) where we demonstrated CuCl₂ hydrolysis using a fixed-bed reactor under optimized conditions. Thermolysis of CuCl₂ and oxide formation are associated hindrances in achieving 100% phase-pure hydrolysis product, Cu₂OCl₂. With an objective to understand the thermolysis and hydrolysis processes at molecular level, both these reactions were investigated independently in the present study using in situ XAS as a probe. The progress of both the reactions was recorded from RT to 400 °C by monitoring temperature-dependent evolution of Cu species using Cu K-edge XAS measurements at BL-09, Indus-2 SRS, RRCAT, Indore, India. XAS results are also corroborated with ex situ analysis by XRD and TG of samples containing various compositions of CuCl₂ mixed with boron nitride (pellets employed for XAS). Besides LCF, hydrolysis product Cu₂OCl₂ yield was further supported by chemical titrations. EXAFS revealed that with increasing temperature, coordination of Cu atoms in reactant CuCl₂ progressively decreased during thermolysis. For hydrolysis process, coordination of Cu atoms in Cu–Cu, Cu–O and Cu–Cl linkages approached towards that of Cu₂OCl₂ and CuO. CuCl₂ diminished and transformed into CuCl (88 mass%) at 350 °C during thermolysis and ~ 60 mass% of Cu₂OCl₂ and 40 mass% of CuO during hydrolysis reaction. Based on in situ investigations in the present study, the most probable reactions taking place during CuCl₂ hydrolysis at different temperatures are proposed for S/Cu of 14.6.