Abstract The results of corrosion tests conducted in lithiated water with 0.01 M LiOH at 360 °C/18.6 MPa revealed that the corrosion resistance of the Zr-0.7Sn-0.35Nb-0.3Fe alloy in wt% was considerably improved by Ge addition of 0.05-0.2 wt%. To further understand the mechanism on the effect of Ge addition on the corrosion resistance of the Zr-0.7Sn-0.35Nb-0.3Fe alloy in wt%, the microstructures of alloys and oxides were investigated by transmission electron microscopy and scanning electron microscopy. For the Zr-0.7Sn-0.35Nb-0.3Fe-0.2Ge alloy, the outer layer of oxide mainly consisted of equiaxed grains, while the middle layer of oxide mainly consisted of many columnar grains in a direction perpendicular to the oxide/metal interface. The suitable amount of Ge can retard the evolution from the columnar grains to the equiaxed grains and delay the developing process of the defects to form the micro-cracks in oxide. The amorphous phase produced around the [Zr(Fe,Cr,Nb,Ge)2]O SPPs could relax the compressive stress, which could improve the corrosion resistance of zirconium alloy. The corrosion resistance could be degraded by the formation of cracks from the coarse [Zr3Ge]O SPPs towards the outer surface of oxide layers.