Zircaloy-4, a zirconium base alloy used extensively as cladding and core structural material in water cooled nuclear reactors, was examined by transmission electron microscopy after neutron irradiation and postirradiation annealing. Phase instabilities found during irradiation include the amorphous transformation and the dissolution of intermetallic precipitate Zr(Fe,Cr)² in the α-recrystallized matrix and the dissolution of the metastable precipitate Zr⁴(Fe,Cr) in the β-quenched matrix. The alloy is driven toward a single phase solid solution during the irradiation. The presence of fast diffusion iron species in the matrix due to the precipitate dissolution may have caused the irradiation growth breakaway phenomenon. The microstructural evolution during irradiation consists of ¯c dislocation development and grain boundary migration. The presence of ¯c dislocations indicates permanent strain in the matrix. The postirradiation annealing at 833 K does not anneal out the ¯c dislocations. The ¯c dislocation is postulated to have developed due to the intergranular constraints under the continuous growth in the breakaway region.