A multilayer balloon catheter is formed to have an inner layer and an outer layer, where the outer layer is adapted to resist shredding and premature rupture. The outer layer is formed of a material having a glass transition temperature that is lower than the transition or melting temperature of the inner layer. By forming the balloon on a mold at a temperature between the glass transition temperature of the outer layer and the glass transition or melting temperature of the inner layer, the outer layer will undergo a thermal relaxation that will alleviate some of the axial orientation of the polymer chains that develop during the formation of the multilayer balloon. This relaxation leads to a resistance to shredding when the balloon is expanded during operation.