Zircaloy-2 becomes susceptible to nodular corrosion in high-temperature, high-pressure steam when the total solute concentration of the beta-stabilizing alloying elements Fe, Ni and Cr in the alpha-zirconium matrix falls below a critical value C-c that is characteristic of the test conditions. C-c for typical commercial Zircaloy-2 in a 24 h/510 degrees C/10.4 MPa steam-test is the precipitate-free alpha-matrix concentration in equilibrium with solute-saturated beta phase at about 840 degrees C, the corresponding critical temperature T-c. Thus, immunity to nodular corrosion is a metastable condition for alpha-Zircaloy that requires fast cooling from above T-c to achieve adequate solute concentration throughout the matrix. Annealing Zircaloy at any temperature below T-c for a sufficiently long time makes it susceptible to nodular corrosion, in the (alpha + chi) phase field, where chi collectively designates the Fe-, Cr- and Ni-containing precipitate phases, lowering the solute concentration to less than C-c by Ostwald ripening can require many hundreds of hours. Above about 825 degrees C, the temperature of the (alpha + chi)/(alpha + beta + chi) transus, solute-saturated beta phase surrounds each precipitate and a strong 'inverse' activity gradient promotes equilibration with the much lower solute concentration in the alpha matrix. Sensitization to nodular corrosion occurs most rapidly at about 835 degrees C between the (alpha + chi)/(alpha + beta +chi) transus and T-c. Annealing Zircaloy at temperatures above T-c for a sufficiently long time will raise the solute concentration above C-c, and with rapid cooling, heal any degree of susceptibility. Annealing within the 'protective coarsening window' between T-c and about 850 degrees C, the temperature of the (alpha + beta + chi)/(alpha + beta) transus, achieves rapid precipitate growth in a matrix immune to nodular corrosion. (C) 2000 Elsevier Science B.V. All rights reserved.