The susceptibility of Zircaloy-4 and crystal-bar zirconium to failure in aqueous ferric chloride solutions has been determined as a function of stress, hydrogen content of the metal, and chloride concentration of the solution. Intergranular failures were observed in all cases. Based on these results, a model for the failure of stressed zirconium-base alloys in chloride solutions is proposed, viz. that cracks initiated at the hydride phase near the surface by dislocation pileups can propagate under the action of a corrosive medium, resulting in eventual catastrophic failure. This model predicts a failure that is dependent on amount of hydride present, orientation of the hydride, and time.