Results of dc magnetization on neutron (n) -irradiated YBa2Cu307 q single crystals are presented.The crystals were irradiated to a fluence of 2X10' nlcm (E &0.1 MeV). The magnetization has been measured at 10, 40, and 70 K for both field orientations. The magnetization is thereby obtained by cooling the sample in zero field to the desired temperature. Then the field is ramped in steps of 0.25 T up to 5 T and reversed in the same steps. At each field the magnetization is measured. The hysteresis hM is defined as the difference in magnetization between descending and ascending branches in the hysteresis loop. At 10 K, we observe an increase of the hysteresis by a factor of 3 for H~~c and by a factor of 10 for H~~a, b due to n irradiation. After irradiation, some of the crystals were annealed at 100, 200, and 300'C for 8 h each. After each annealing step, the critical current densities and the transition temperatures were determined again. We observe that following the 300'C annealing, the magnetization hysteresis for H~~a, b is almost reduced to the preirradiation level (a reduction in J, of 90%), in contrast to the H~~c case, in which the decrease in hysteresis due to annealing is much less (a reduction in J, of 30%). Crystals irradiated under the same conditions were used for transmission-electron-microscopy (TEM) studies.By comparison between TEM and magnetization measurements, the role of the cascade defects in pinning was determined. It is furthermore shown by TEM that the cascade defects do not anneal for comparable annealing temperatures. We find that the hysteresis for H~~c is governed by both the cascade defects which do not anneal and point defects or their clusters on the Y layers or Cu02 planes which do anneal, whereas for H~~a, b, pinning is determined by oxygen defects in the CuO chains which anneal due to oxygen diffusion.