Plasma nitridation was conducted to modify the surfaces of Zircaloy-4. Scanning electron microscopy (SEM), transmission electron microscopy (TEM), and Raman analysis were used to characterize microstructures and phases. Surface indentation and cross-sectional indentation were performed to evaluate mechanical property changes. Nitridation forms a thin layer of ZrN phase, followed by a much deeper layer affected by nitrogen diffusion. The ZrN phase is confirmed by both TEM and Raman characterization. The Raman peaks of ZrN phase show a temperature dependence. The intensity increases with increasing nitridation temperatures, reaches a maximum at 700 °C, and then decreases at higher temperatures. The ZrN layer appears as continuous small columnar grains. The surface polycrystalline ZrN phase is harder than the bulk by a factor of ~8, and the nitrogen diffusion layer is harder by a factor of ~2–5. The activation energy of nitrogen diffusion was measured to be 2.88 eV. The thickness of the nitrogen-hardened layer is controllable by changing the nitridation temperature and duration.