In laboratory, materials designed for engineering applications, specifically for fatigue, are generally tested under symmetrical cyclic loading (stress ratio, R = −1), but many structural components exhibit less fatigue life than predicted from symmetric loading due to asymmetric cyclic loading during service. This study deals with fatigue behaviour of Zircaloy-2 and presents the effect of mean stress (σm), stress amplitude (σa), stress rate ($$\dot{\sigma }$$) on fatigue life, deformation and fracture behaviour at 300 °C under asymmetric cyclic loading. A series of fatigue tests are performed at 300 °C under asymmetric stress-controlled loading with different combinations of σm (60–80 MPa), σa (115–135 MPa) and $$\dot{\sigma }$$ (30–750 MPa/s). Deformation behaviour and microstructural changes under the influence of above parameters (σm, σa and $$\dot{\sigma }$$) are examined by transmission electron microscope. It is observed that plastic strain increases with rise in σm as well as σa and cyclic life is reduced; on the other hand, with increase in $$\dot{\sigma }$$ accumulation of plastic strain decreases and fatigue life is enhanced. The results are correlated with microstructural changes and fracture behaviour of the material under different test conditions.