A chlorination process for recovering Zr from zircaloy scrap has been studied. Zircaloy chlorination was possible at temperatures as low as 220 degrees C. The scale microstructure and its effect on the zircaloy reactivity was analysed using Thermogravimetric analysis (TGA), X-ray diffraction (XRD), energy dispersive X-ray spectroscopy (EDXS) and scanning electron microscopy (SEM) techniques. A solid-solid phase transformation took place into the oxide scale during the zircaloy chlorination. Zirconium, as ZrCl4(g), was separated from the oxide scale and chlorides of Cr and Fe. The effect of the reaction temperature was also analysed.