Ab initio calculations predict high positive binding energy (∼1 eV) between niobium atoms and self-interstitial configurations in hcp zirconium. It allows the expectation of increased niobium fraction in self-interstitials formed under neutron irradiation in atomic displacement cascades. In this paper, we report the results of molecular dynamics simulation of atomic displacement cascades in Zr-0.5%Nb binary alloy and pure Zr at the temperature of 300 K. Two sets of n-body interatomic potentials have been used for the Zr-Nb system. We consider a cascade energy range of 2–20 keV. Calculations show close estimations of the average number of produced Frenkel pairs in the alloy and pure Zr. A high fraction of Nb is observed in the self-interstitial configurations. Nb is mainly detected in single self-interstitial configurations, where its fraction reaches tens of percent, i.e. more than its tenfold concentration in the matrix. The basic mechanism of this phenomenon is the trapping of mobile self-interstitial configurations by niobium. The diffusion of pure zirconium and mixed zirconium-niobium self-interstitial configurations in the zirconium matrix at 300 K has been simulated. We observe a strong dependence of the estimated diffusion coefficients and fractions of Nb in self-interstitials produced in displacement cascades on the potential.