A nanostructured surface layer was induced on the surface of Zr-4 alloy with typical hcp structure by the method of surface mechanical attrition treatment (SMAT). XRD was applied to identify the average surface grain size of specimens processed for different duration. The results show that the minimum average grain size was about 20 nm for 15 min SMAT. Optical microsco(OM), transmission electron microscopy (TEM) and high-resolution transmission electron microscopy (HREM) were adopted to observe the microstructure of nanocrystallized surface layer, and the grain refinement mechanism of Zr-4 was studied.