The corrosion behavior of Zircaloy-4 alloy after different heat treatments in 550 oC/25 MPa supercritical water was investigated. Microstructure of the oxide film was observed by SEM. Nodular corrosion was observed in all the alloys regardless of heat treatment. Based on the microstructure observation, the nodular corrosion mechanism of Zircaloy-4 was discussed. The initial oxide film formed on Zircaloy-4 after corrosion is dense with very few micro-pores and micro-cracks. However, densities of oxides and Zircaloy-4 substrate are different and it leads to expansion tendency of brittle oxide film which imposes complex stress on the film. Therefore, crack formation and propagation occur at oxides/metal interface and result in the rupture of the film in the weakest regions under the effect of the stress which increases with the growth of the film. Subsequently, corrosive water penetrates into the cracks and forms effective oxygen sources, which accelerate the localized corrosion. The non-uniform corrosion in the film finally evolves to nodular corrosion. The formation of the effective oxygen sources at oxides/metal interface is the most important factor for nodular corrosion. Other factors, such as alloying elements, heat treatments, size and distribution of secondary phases and anisotropy growth of oxides, could also affect the nodular corrosion behavior via changing the microstructure of oxide film.