Coating the surface of zirconium alloy is an important way to improve the accident tolerance capability for nuclear fuel cladding after the Fukushima nuclear power plant accident. Transmission electron microscopy (TEM) samples of the irradiated N36 alloy with Nb coating were prepared by focusing ion beam (FIB). Bubble evolution during in-situ heating in the irradiated Nb-coated N36 alloy samples was investigated by in-situ TEM. The results show that the interface has a strong effect on bubble growth during the annealing process. The bubbles near the interface were captured and transported by the interface, which leads to the growth rate of the bubbles near the interface is lower than those away from the interface. The analysis of elements after annealing indicates that both irradiation and heating can increase the diffusion distance of the elements between coating and matrix, the diffusion during irradiation is mainly caused by the thermal spike diffusion mechanism. The diffusion of elements is beneficial to improve the bonding properties of the coating and provide certain corrosion resistance for N36 alloy.