A new method for management of waste Zircaloy fuel hulls is proposed as an alternative to compaction and burial. It involves using the waste as a feedstock in a chemical process for preparing inorganic zirconate ion exchange material. Enough zirconate could be prepared from the waste hulls to stabilize all the high-level liquid waste generated in light water reactor fuel reprocessing, and in this way the two waste streams would be combined. The proposed conversion operation would involve chlorination of the Zircaloy waste with NH4Cl and distillation of volatile chlorides, reaction of the distillate with isopropyl alcohol to form intermediate alkoxides, and hydrolysis of the intermediate to form the zirconate. The conversion would be accomplished with recycle of all reagents so that no new major waste stream would be created. The chemical basis for the conversion process, simplified process flowsheets, and an analysis of the various options illustrate the feasibility of the full-scale process. A preliminary economic study was made that indicated that the full-scale operation should be technically and economically feasible.