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The microstructure of ZrO2 formed on sheet materials of Zircaloy-2 (Zr2), Zircaloy-4 (Zr4), and an alloy of 1.0% Nb added to Zircaloy-4 (1Nb-Zr4) was analyzed using HRTEM (high-resolution transmission electron microscopy). The relationship between the corrosion behavior of the alloys and the microstructure is discussed. Stress-relieved sheet specimens of the three alloys were prepared and corrosion tested under static conditions in steam at 673 K and 10.3 MPa for a total of 220 days. The order of corrosion resistance in 673-K steam was Zr2, 1Nb-Zr4, and Zr4. Several transitions were observed in the corrosion kinetic curve of 1Nb-Zr4 and Zr2. However, only the first transition was observed in the curve of Zr4. Oxide structure in the pre-transition region on Zr4 was analyzed to be in the following order from the outside surface: columnar m-ZrO2, t-ZrO2 layer, substoichiometric Zr oxide layer, and α-Zr matrix. The t-ZrO2 layer was approximately 50 to 80 nm thick, and the substoichiometric Zr oxide layer was approximately 100 to 200 nm. These layers were absent in the microstructure of the oxide in the post-transition region. The substoichiometric Zr oxide layer consisted of m-ZrO2 grains that were less than 10 nm in diameter and some as yet unidentified grains that had lattice parameters similar to distorted and significantly oriented α-Zr. However, the t-ZrO2 layered structure and the substoichiometric Zr oxide layer structure were observed in the post-transition oxides on Zr2 and 1Nb-Zr4. It was also observed that transformation of columnar grains to fine equiaxed grains had occurred near the lateral cracks and the incorporated intermetallic precipitates in post-transition oxides. It is implied from these results that the t-ZrO2 layer and the substoichiometric Zr oxide layer structures play an important role as a barrier layer in controlling the occurrence of kinetic transitions.