Zr-2.5Nb is a dual-phase alloy consisting of an hcp (α) phase containing up to 1 wt. % Nb and a bcc (β) phase containing about 20 wt. % Nb. The α phase constitutes the majority of the material volume. For in-service Zr-2.5Nb CANDU pressure tubes, the structures of both the α and β phases evolve as a result of the effects of irradiation and operating temperature: dislocation loop formation in the α phase and decomposition or reconstitution of the β phase. X-ray diffraction data are used to study the irradiation damage (represented by the integral breadth of hcp diffraction peaks and the lattice parameter of the β phase). This evolution of the microstructure must be modeled as a function of operating conditions so that the state of the microstructure of in-service pressure tubes can be predicted. Delayed hydride cracking (DHC) growth rates in Zr-2.5Nb CANDU pressure tube material also depends on the state of the microstructure. In this paper, it is shown that the majority of the DHC growth rate changes can be ascribed to thermal and irradiation effects on the microstructure.