S/TEM imaging has shown that the hydrides precipitated in Zr-2.5Nb pressure tube alloy under externally applied hoop tensile stress or under stress-free conditions show different morphologies. When precipitating under stress, at the bulk scale the hydrides tend to align towards the radial direction , forming so-called ‘re-oriented’ or radial hydrides. At the grain level, the observed re-oriented hydrides consisted of hydride platelets growing along the tube radial direction. In contrast, the hydrides precipitated under stress-free conditions were orientated along the transverse direction, and consisted of platelets that had grown along the tube transverse direction, and exhibited almost full transformation of the parent Zr grain. Upon heating, TEM samples where both transverse and radial oriented platelets were present, the radial platelets were shown to be more resistant to heating, i.e., dissolving at a higher temperature than the transverse hydrides. The migration of the hydride/Zr phase boundary was observed to follow different directions during dissolution, depending on the morphology of the individual hydrides. Lastly, the texture of the Zr grains where hydrides precipitated was analyzed by electron diffraction . Results showed that hydrides preferred to form in grains with (0002) pole aligned in/or close to the TD (transverse direction)-RD (radial direction) plane when external hoop tensile stress was applied, and the applied stress showed a profound impact on where hydrides precipitated within the available population of differently oriented Zr grains.