Hydride precipitation and reorientation has the potential to embrittle zirconium alloys. This study aims to better understand the influence of the Zr microstructure on hydride precipitation and reorientation. Specifically, the crystallography, phase stability and morphology of hydride precipitation was correlated to microstructural variations due to changes in the metallurgical state of the zirconium alloy. The work highlights, that microstructural features induced during recrystallisation have a significant influence on the distribution and orientation of hydrides when no external stress is applied. The stability of γ hydride was shown to be dictated by metallurgical state whereby its formation was promoted in the recrystallised sample owing to its reduced strength. The influence of grain orientation on g stability was also explored. It was highlighted that upon cooling, grains oriented in the <10-10> direction are under compression such that γ hydride formation is supressed. This study showed that the metallurgical state did not have a significant influence on the extent of hydride reorientation during thermomechanical loading, but rather extrinsic factors such as the applied stress and temperature dictated reorientation behaviour. Quantification of the dislocation density in both the matrix and hydride during precipitation highlighted that extensive matrix recovery takes place during hydriding. It was also shown that the dislocation density in the hydride is lower after thermomechanical loading whereby the application of both a hoop and axial stress during reprecipitation enabled greater accommodation of the volumetric expansion that occurs during precipitation.