The machining step for manufacturing Zircaloy-4 (Zr-4) tubes and end caps used in pressurized water nuclear reactors (PWRs) to generate large amounts of tailings from this material. Due the high cost of the Zr-4 its requires recycling, which represents a great economy for Brazilian Nuclear policy and also avoids its disposal to the environment. In this work, the machining chips of Zr-4 were heated in the hydrogen atmosphere (923 K), and the powder from this step was sieved in the 200 and 325 mesh (<75 and <45 µm). In this stage, materials that did not absorb the hydrogen proven by the machining were removed, reducing the final contamination by Fe of the Zr-4 alloy . Grinding was performed in the high energy mill, using zirconia pot and spheres to reduce contamination. The experiments were performed at different milling times (0 to 120 min). One sample was pressed at 200 MPa (isostatic pressure) and sintered at 1423 K for 10 h. The microstructure was analyzed by scanning electron microscopy (SEM) and Vickers microhardness was determined. . The results showed that after 60 min milling the average particle size was 2.4 µm, Vickers microhardness after sintering was 425 HV and average grain size around 50 µm. The samples shown hydrostatic density values of 99% compared to the theoretical, and a microstructure shows typical morphology of phase alpha of Zr-4 and equiaxial grains. To reduce chip storage areas, a reduction of 27 times in the volume occupied by the chips after hydration, comminution and pressing was obtained. It was possible to machine the end caps from the samples with the lowest microhardness measurement.