This paper describes the corrosion behavior and the ZrO₂ microstructure of Zircaloy-4 (Zry-4) cladding tubes that were intermediate annealed at various temperatures. The corrosion behavior of the cladding tubes was studied by autoclave tests performed under 633 K water condition and 673 K steam condition. A TEM examination shows that the microstructure of ZrO₂ formed on the Zry-4 matrix consisted of both the columnar structure and the equiaxed grain. The grain size of the columnar grain was approximately 30 by 200 nm, while that of the equiaxed grain was less than 20 nm. The equiaxed grain was dominantly observed near lateral cracks and around intermetallic compounds that were incorporated into the ZrO₂ film. An analysis of the HR-SEM images indicated that the equiaxed grain to columnar grain volume ratio increased with increasing weight gain, especially after the first transition. The equiaxed grain to the columnar grain volume fraction decreased with increasing annealing temperature, which corresponded to decreasing weight gain. It was suggested that grain boundary diffusion of oxygen ions was accelerated by grain-size change of the oxide owing to the ZrO₂ microstructure transformation from the large columnar grains to the fine equiaxed grains. The ZrO₂ microstructure transformation might be caused dominantly by the oxidation of the intermetallic precipitates. The intermetallic precipitates were fine and uniformly distributed in the low-temperature TREX annealed Zry-4. This resulted in high-temperature TREX annealing being beneficial for improving corrosion resistance of the Zry-4 tube in PWR environments.