The coverage and temperature dependence of ZIRLO cladding with H2O adsorption are studied using synchrotron-based high-resolution photoemission spectroscopy (HRPES). Based on the analytical results of the Zr 3d, O 1 s, C 1 s, and Sn 3d HRPES profiles prior to H2O adsorption, we determine the surface compositions of O2−, hydroxyl OH−, chemisorbed H2O, zirconium carbide, adventitious carbon, Sn metal, and SnO2 in ZIRLO. When ZIRLO is exposed to H2O molecules, the relative proportion of zirconium metal decreases, whereas that of the total zirconium oxides increases, suggesting the reaction between H2O and the zirconium metal in ZIRLO. On annealing a sample with 1000 L H2O on ZIRLO at 300 °C, Zr2O3 and ZrO2 decompose, and oxygen diffuses into the bulk, thereby reducing the oxidation states of zirconium on the surface. Moreover, at this temperature, the excess H2O molecules on ZIRLO are thoroughly desorbed and tin element is diffused into the bulk in ZIRLO.