The microstructure and mechanical properties of annealed Zr-4 alloy subjected to surface mechanical rolling treatment (SMRT) have been systematically investigated. The effect of rolling passes and rolling depth per pass on the thicknesses of NG (nano grain) / UFG (ultrafine grain) layer and deformed layer in SMRTed Zr-4 alloy are studied. The optimized process parameters are 8 passes and depth of 40 μm per pass. A gradient microstructure consisting of NG/UFG layer, deformed layer and CG layer are produced in the SMRTed Zr-4 alloy from the treated surface to the matrix with thicknesses of 100μm and 300μm. The microhardness on surface significantly increases due to SMRT. The yield stress and ultimate tensile strength of SMRTed Zr-4 alloy are 352MPa and 600MPa, increase by 7% and 9%, respectively. And the elongation is slightly reduced.The rule-of-mixture for strength can be used to estimate the combined strengths of Zr-4 alloy with a combination of NG/UFG layer, the deformed layer, and the CG matrix.