Zirconium-based alloys Zircaloy-2 and Zircaloy-4 are widely used in the nuclear industry as cladding materials for light water reactor (LWR) fuels. These materials display a very good combination of properties such as low neutron absorption, creep behavior, stress-corrosion cracking resistance, reduced hydrogen uptake, corrosion and/or oxidation, especially in the case of Zircaloy-4. However, over the last couple of years, in the post-Fukushima Daiichi world, energetic efforts have been undertaken to improve fuel clad oxidation resistance during off-normal temperature excursions. Efforts have also been made to improve upon the already achieved levels of mechanical behavior and reduce hydrogen uptake. In order to facilitate the development of such novel materials, it is very important to achieve not only engineering control, but also a scientific understanding of the underlying material degradation mechanisms, both in working conditions and in storage of used nuclear fuel.This report strives to contribute to these efforts by constructing the thermodynamic models of both alloys; constructing of the respective phase diagrams, and oxidation mechanisms. A special emphasis was placed upon the role of zirconium suboxides in hydrogen uptake reduction and the atomic mechanisms of oxidation. To that end, computational thermodynamics calculations were conducted concurrently with first-principles atomistic modeling.