<p>Zr-2.5 wt.% Nb pressure tube removed from KAPS-2 PHWR after 15.3 effective full power year of operation was subjected to detailed microstructural examination under a transmission electron microscope. Emphasis was given to examine and analyze the defects evolved in the microstructure due to neutron irradiation. For the purpose of comparison, samples from the unirradiated offcut of the same pressure tube were also examined. The unirradiated microstructure comprised laths of α-Zr phase, with β-Zr(Nb) phase distributed both in the form of continuous film as well as globular precipitates at the lath boundaries. The Nb-content of interlath β-precipitates was found to be higher in comparison of β-film. This microstructure, upon irradiation, did not exhibit any gross change in respect of matrix phase morphology, although spheroidization of β-Zr(Nb) film, thereby leading to film discontinuity and enhanced precipitation at lath boundaries, was noticed. The irradiated matrix phase showed presence of &lt; a &gt;—and &lt; c &gt; -type dislocation loops.</p>