We have performed an in-depth characterisation of the microstructure evolution of 20Cr-25Ni Nb-stabilised austenitic stainless steel during 1 h isochronal annealing up to 1100°C using scanning electron microscopy. This steel grade is used as cladding material in Advanced Gas-cooled fission reactors, due to its resistance to thermal creep and oxidation. The initial deformed microstructure undergoes recrystallisation via a strain-induced boundary migration mechanism, attaining a fully recrystallised microstructure at 850°C. A number of twins are observed in the vicinity of deformation bands prior to the start of recrystallisation. New Nb(C, N) particles form gradually in the microstructure, and the particle dispersion presents a maximum volume fraction of 2.7% at 930°C. At higher temperatures, the smaller particles become unstable and gradually dissolve in the matrix. Consequently, the Zener pinning pressure exerted on the grain boundaries is progressively released, triggering the growth of the austenite grains up to an average size of ∼47 μm at 1100°C. The observed temperature window for recrystallisation and grain growth can be predicted by a unified model based primarily on the migration of high- and low-angle grain boundaries. LAY DESCRIPTION: Austenitic stainless steel containing high percentage of chromium and nickel is currently used as fuel cladding material in the British Advanced Gas-cooled Reactors (AGR). This material has been chosen because of its high resistance to thermal creep and corrosion, both enhanced by the presence of a fine dispersion of carbonitrides precipitated during the cladding thermomechanical processing. During the time spent in the reactor core, few fuel cladding elements can become susceptible to local chromium depletion at grain boundaries, which is ascribed to the time evolution of the microstructural damage caused by the neutron bombardment in the reactor core. This depletion might increase the susceptibility of this steel to intergranular corrosion attacks during medium-to-long term storage of spent fuel elements in water ponds. The severity of the local chromium depletion depends not only on the irradiation conditions, but also on the grain boundary geometry. We have investigated the recovery, recrystallisation and grain growth of AGR stainless steel during 1 h annealing at selected temperatures relevant for the thermomechanical processing of the steel claddings, focusing on the formation and evolution of grain boundaries and second phases. These two features play a key role in the progression of the neutron damage and the subsequent development of local chromium depletion during reactor service operations. A deep understanding of the mechanisms and conditions behind their formation during the thermomechanical processing of the cladding material and their interaction with each other constitutes the foundation to evaluate, and potentially mitigate, the effect of irradiation on the cladding material.