The relaxation of Fe/MgO/Fe tunnel junctions grown epitaxially on (001) MgO substrates has been measured by in-situ grazing incidence in-plane X-ray diffraction during the thermal annealing cycle. We find that the Fe layers are fully relaxed and that there are no irreversible changes during annealing. The MgO tunnel barrier is initially strained towards the Fe but on annealing, relaxes and expands towards the bulk MgO value. The strain dispersion is reduced in the MgO by about 40% above 480K post-annealing. There is no significant change in the “twist” mosaic. Our results indicate that the final annealing stage of device fabrication, crucial to attainment of high TMR, induces substantial strain relaxation at the MgO barrier/lower Fe electrode interface.