The detailed study of the effect of the initial microstructure on its evolution under hydrostatic compression before, during, and after the irreversible α→ω phase transformation and during pressure release in Zr using in situ x-ray diffraction is presented. Two samples were studied: one is plastically pre-deformed Zr with saturated hardness and the other is annealed. Phase transformation α→ω initiates at lower pressure for a pre-deformed sample but for a volume fraction of ω Zr, c>0.7, a larger volume fraction is observed for the annealed sample. This implies that the proportionality between the athermal resistance to the transformation and the yield strength in the continuum phase transformation theory is invalid; an advanced version of the theory is outlined. Phenomenological plasticity theory under hydrostatic loading is outlined in terms of microstructural parameters, and plastic strain is estimated. During transformation, the first rule is suggested, i.e., the average domain size, microstrain, and dislocation density in ω Zr for c<0.8 are functions of the volume fraction, c of ω Zr only, which are independent of the plastic strain tensor prior to transformation and pressure. The microstructure is not inherited during phase transformation. Surprisingly, for the annealed sample, the final dislocation density and the average microstrain after pressure release in the ω phase are larger than for the severely pre-deformed sample. The results suggest that an extended experimental basis is required for the predictive models for the combined pressure-induced phase transformations and microstructure evolutions.