We studied the dispersion and spheroidization treatment of zirconium hydride in reactor-grade zirconium alloys. Our aim was to find a workable way to improve the properties of Zircaloys. A scanning electron microscope was used to observe zirconium hydride precipitated in specimens of Zircaloy-2 and Zircaloy-4. We also examined hardness and corrosion before and after spheroidization in hydrogen. Experimental procedures and results can be summarized as follows. The specimens of low hydrogen concentration (<680 ppm) were hydrided at 420°C for 15 h, then cooled at a rate of <5 °C/min, and finally spheroidized at 520°C, just below the eutectoid temperature, for 20 to 72 h (the exact time required depending on the concentration of hydrogen). Successful spheroidization of zirconium hydride was obtained. The specimens of high hydrogen concentration (680 to 2210 ppm) were cycled near the eutectoid temperature, i.e., 547° C, for six to eight times and then annealed f or 30 to 128 h (the exact time depending on hydrogen concentration); finally, the specimens were slowly cooled at a rate of <5°C/min. It was found that for specimens with a hydrogen concentration ranging from 1000 to 2000 ppm, the heat treatment described above is satisfactory. But for specimens with a hydrogen concentration >2000 ppm, a heat treatment time >128 h at 520°C is required. The corrosion resistance of a spheroidized specimen was better than that of a specimen with platelet hydrides.