The stability of structural materials in extreme nuclear reactor environments—with high temperature, high radiation, and corrosive media—directly affects the lifespan of the reactor. In such extreme environments, an oxide layer on the metal surface acts as a passive layer protecting the metal underneath from corrosion. To predict the irradiation effect on the metal layer in these metal/oxide bilayers, nondestructive depth-resolved positron annihilation lifetime spectroscopy (PALS) and complementary transmission electron microscopy (TEM) were used to investigate small-scale defects created by ion irradiation in an epitaxially grown (100) Fe film capped with a 50 nm Fe2O3 oxide layer. In this study, the evolution of induced vacancies was monitored, from individual vacancy formation at low doses—10−5 dpa—to larger vacancy cluster formation at increasing doses, showing the sensitivity of positron annihilation spectroscopy technique. Furthermore, PALS measurements reveal how the presence of a metal–oxide interface modifies the distribution of point defects induced by irradiation. TEM measurements show that irradiation induced dislocations at the interface is the mechanism behind the redistribution of point defects causing their accumulation close to the interface. This work demonstrates that the passive oxide layers formed during corrosion impact the distribution and accumulation of radiation induced defects in the metal underneath and emphasizes that the synergistic impact of radiation and corrosion will differ from their individual impacts.