Disclosed are a zirconium alloy for a nuclear fuel cladding having a good oxidation resistance in a severe reactor operation condition and a method of preparing zirconium alloy nuclear fuel claddings by using thereof. The zirconium alloy includes 1.8 to 2.0 wt % of niobium (Nb); at least one element selected from iron (Fe), chromium (Cr) and copper (Cu); 0.1 to 0.15 wt % of oxygen (O); 0.008 to 0.012 wt % of silicon (Si) and a remaining amount of zirconium (Zr). The amount of Fe is 0.1 to 0.4 wt %, the amount of Cr is 0.05 to 0.2 wt %, and the amount of Cu is 0.03 to 0.2 wt %. A good oxidation resistance of the nuclear fuel cladding may be confirmed under a severe reactor operation condition at an accident condition as well as a normal operating condition of a reactor, thereby improving economic efficiency and safety.