Cladding for nuclear fuel elements which is formed with a zirconium metal barrier layer bonded to the inside surface of a zirconium alloy tube and which is sized by a cold working tube reduction process and is heat treated after final reduction at a temperature and for a time period which allows substantially complete recrystallization of the zirconium metal barrier layer and provides a fine-grained microstructure therein and which stress-relieves but does not fully recrystallize the zirconium alloy tube. The crystallographic structure of the zirconium metal barrier layer may be improved by compressive deformation such as shot-peening.