The hydride-phase formation and its influence on the fatigue behavior of a Zircaloy-4 alloy charged with hydrogen gas are investigated. First, the microstructure and fatigue crack propagation rate of the alloy in the as-received condition are studied. Second, the formation and homogeneous distribution of the delta zirconium hydride in the bulk and its effect on the fatigue crack propagation rate are presented. The results show that in the presence of hydrides, the zirconium alloy exhibits reduced toughness and enhanced crack growth rates. Finally, the influence of a preexisting fatigue crack in the specimen and the subsequent hydride formation are examined. The residual lattice strain profile around the fatigue crack tip is measured using neutron diffraction. It is observed that the combined effects of residual strains and hydride precipitation on the fatigue behavior are more severe leading to propagation of the crack under near threshold loading.