Concrete canisters for interim dry storage of spent, irradiated Canadian Deuterium Uranium (CANDU) fuel are being developed by Atomic Energy of Canada Limited. The canisters are designed to contain fuel safely for periods of 50 to 100 yr in carbon steel baskets sealed inside a steel- and lead-lined concrete shield. A demonstration program at the Whiteshell Nuclear Research Establishment is utilizing four instrumented canisters to establish the canister structural integrity when exposed to the thermal stresses generated by the decay heat of the stored fuel. A review of other potential materials problems identified three areas of concern: corrosion of the fuel basket and canister lining, fuel sheath oxidation, and UO2 oxidation. Preliminary analysis suggests that the first of these will be minimized by the migration of moisture to the outside of the canister under the influence of the temperature gradient, and the second is predicted to be insignificant for periods up to 100 yr. The third area was less well understood, and a detailed experimental study was therefore undertaken. Initial canister designs conceived the use of air-filled fuel baskets, with UO2 fuel temperatures initially in the 200 to 300°C range. Oxidation of the UO2 in defected fuel could cause contamination of the baskets and complicate subsequent fuel retrieval. The rates and mechanism of UO2 oxidation have been studied using powders, sintered pellets, and intentionally defected fuel elements. The oxidation in fuel elements proceeds by the formation of U3O8, swelling and splitting of the sheath and exposure of more fuel, and the release of finely powdered U3O8. Some data are given for the oxidation rates of irradiated fuel elements together with the approximate times required to oxidize a single fuel pin. In the present demonstration canisters, the possibility of oxidation of the fuel has been eliminated by storing it in helium-filled baskets.