The present invention relates to a zirconium alloy having excellent corrosion resistance and mechanical properties and a method for preparing a nuclear fuel cladding tube by zirconium alloy. More particulary, the present invention is directed to a zirconium alloy comprising Zr-aNb-bSn-cFe-dCr-eCu (a=0.05-0.4 wt %, b=0.3-0.7 wt %, c=0.1-0.4 wt %, d=0-0.2 wt % and e=0.01-0.2 wt %, provided that Nb+Sn=0.35-1.0 wt %), and to a method for preparing a zirconium alloy nuclear fuel cladding tube, comprising melting a metal mixture comprising of the zirconium and alloying elements to obtain ingot, forging the ingot at &bgr; phase range, &bgr;-quenching the forged ingot at 1015-1075° C., hot-working the quenched ingot at 600-650° C., cold-working the hot-worked ingot in three to five passes, with intermediate vacuum annealing and final vacuum annealing the worked ingot at 460-540° C., which can be applied to the core components in a light water and a heavy water atomic reactor type nuclear power plant.