Electron microscope techniques were used to investigate black and white oxide films, formed before and after the oxidation transition, on Zircaloy-2 in superheated steam at 673 and 773 K. The nodular corrosion appearing on black oxide films during oxidation transition has been also investigated. A compressive stress gradient distributed through the thickness of black oxide films was measured to be ∼500 MPa/μm in films with a thickness of 1.2 (μm decreasing to ∼60 MPa/μm with an increase in film thickness to 2.1 μm when nodular corrosion appears. Monoclinic, cubic, and tetragonal lattice structures in black oxide films formed both at 673 and 773 K have been identified. The proportion of cubic and tetragonal phases decreases with the increase of temperature and turns into an exclusively monoclinic lattice structure in white oxide films after oxidation transition. The grain size in black oxide films is extremely fine (<50 nm), and grain contrast is indistinct. The high internal stress in black oxide films induced an imperfect crystal structure. It was observed from a high resolution lattice image that the oxide crystals consist of mosaics ∼20 nm in size. The larger spacing on (100) and (010) planes in some places might be associated with clusters of tin atoms. Pores (<10 nm) existing on triple grain boundaries in the white oxide films have been observed. Small areas in black oxide films, which are 3 to 4 times more than the average thickness, are considered to be the nuclei of nodular corrosion. The oxide/metal interface at nodules are characterized by the protrusion, which have the appearance of cauliflower, with small semispherical bumps overlapping one another, and ripple marks on small bumps. These are characteristics that might occur because nodules grow much faster than the surrounding oxide. The model for the formation of nodular corrosion previously proposed by the author is discussed further in light of results obtained in the present work.