This paper presents some of the key technologies in the area of fuel performance that Korea Atomic Energy Research Institute (KAERI) has developed for a dual-cooled annular fuel, which should be available before the annular fuel can be considered to be used in a commercial nuclear power plant. First, considering the characteristics of the annular fuel - that it has two coolant channels, outer and inner, and also two gaps between the pellet and cladding - KAERI has developed a computer code DUOS that calculates temperature, swelling, densification, and stress and strain in the annular fuel. The DUOS code was verified by comparing it with either ABAQUS or analytical solutions. The first irradiation test of sintered annular fuel pellets with different initial densities was performed in the HANARO reactor up to a pellet burnup of 10.9 MWd/kg U and then subjected to postirradiation examination. Gamma scanning along the axial direction of the irradiated fuel rods showed the geometrical integrity of the annular fuel pellets, ruling out the possibility that fragmented annular pellet cracks could move down along the axial direction of the fuel rod and hence the pellet stack length could be reduced. Macroscopy of the annular fuel pellets revealed many radial and circumferential cracks that could lead to different outer and inner gap sizes along the axial direction of the annular fuel rod, which would suggest that heat transfer to both the outer and inner coolant channels during the irradiation of annular fuel rods would depend on the axial profile of the two gaps along the axial direction. The swelling rate derived from density measurement of the annular fuel pellets with 98.0% theoretical density was 0.25 to 0.60 vol % per 10 MWd/kg U, corresponding to the one observed for solid fuel pellets irradiated at low temperature.