Using scanning electron microscopy (SEM), this study evaluates the microstructure evolution of uranium-molybdenum (U-Mo) fuel foils made with and without heat treatment at medium burn-up (of approximately 5 × 1021 f/cm3). The impact of annealing treatments on critical microstructural properties of the U-Mo fuel foils, including porosity, grain structure, Mo homogeneity, and fuel interaction with the Zr interlayer, was examined using large area lift outs (LALOs). The heat-treated specimens presented less grain refining at these burnups when compared to the non-heat-treated specimens. Grain refinement was associated with porosities and fission products precipitation. These observations may indicate that heat treatment can influence fuel swelling during irradiation. Chemical inhomogeneity (Mo banding) was found to persist in the non-heat-treated samples but was not present in the heat-treated samples. Thus, heat-treated U-Mo foils allow for more predictable fuel behavior under irradiation with respect to non-heat-treated foils. The U-Mo and Zr interaction layer appears to be thicker and more continuous in the heat-treated sample which has been associated with stronger interface integrity during irradiation, as observed in previous studies. These observations may indicate an overall improved performance of heat-treated fuel foil in a reactor, which needs to be confirmed with higher burnup samples. The effect of local burn-up on grain size/refinement and porosities in each LALO specimen, sampled from different positions in the fuel foil, was difficult to analyze due to the large standard deviation of these parameters. Finally, evidence of grain refinement by polygonization may be present in these specimens.