This study reports the oxidation behavior of an alpha titanium alloy, Ti-Al-Zr. The alloy was isothermally heat-treated in the air at 760 °C for durations up to 700 hours. Heat treatment led to the formation of an oxide layer on the surface and an alpha case beneath the oxide layer. The oxide and the alpha case were characterized by optical microscopy, micro-hardness measurement, scanning electron microscopy (SEM), X-ray diffraction (XRD) and glow discharge optical emission spectroscopy (GDOES). The oxide was predominantly rutile; however, other metal oxides were also present. An oxide growth mechanism has been proposed. An alpha case of a maximum depth of 646 μm was measured for the specimen exposed for 700 hours. The diffusion coefficient of oxygen in the metal matrix was calculated to be 8.83 × 10−14 m2/s. The alpha case formation led to straining of the matrix because of oxygen dissolution. Micro-strain was calculated from XRD measurements using the “Modified Williamson–Hall (Modified W–H)” method. A maximum micro-strain of 0.37 pct was calculated for the prismatic plane (110) for a 72 hours exposed specimen. A decreasing trend in the micro-strain value with increasing exposure time has been reported and explained.