Understanding the mechanisms of degradation in lead halide perovskite nanocrystals is critical for their future application in optoelectronic devices. We report single-particle measurements of the photoluminescence from cesium lead bromide nanocrystals coated with a silica shell (CsPbBr₃@SiO₂). Through correlative imaging, we quantified changes in the fluorescence intensity trajectories of the same nanocrystals before and after annealing them at different temperatures. We observe that nearly equal numbers of CsPbBr₃@SiO₂ nanocrystals exhibit an increase versus decrease in the amount of time they spend in an emissive state after annealing at temperatures of 70 and 100 °C. On the other hand, annealing at 120 °C produces a decrease in the on-fraction for most nanocrystals and, correspondingly, a substantial decrease in the photoluminescence intensity for a thin film annealed at this temperature. We attribute the differences in behavior among individual nanocrystals to heterogeneity in the distribution of trap states that are initially present. X-ray photoelectron, time-resolved photoluminescence, and transient absorption spectroscopies performed on thin films of CsPbBr₃@SiO₂ nanocrystals indicate that thermal annealing heals electron traps by passivating surface Pb ions and simultaneously creates hole traps through the formation of Pb and Cs vacancies. The relative rates of these parallel processes depend on the annealing temperature, which are important to account for when developing passivation strategies for lead halide perovskite nanocrystals in optoelectronic devices that will operate at elevated temperatures.