Abstract: In a zirconium-alloy fuel element cladding, a method for generating regions of coarse and fine intermetallic precipitates across the cladding wall is provided. The method includes steps of specific heat treatments and anneals that coarsen precipitates in the bulk of the cladding. The method also includes at least one step in which an outer region (exterior) of the cladding is heated to the beta or alpha plus beta phase, while an inner region (interior) is maintained at a temperature at which little or no metallurgical change occurs. This method produces a composite cladding in which the outer region comprises fine precipitates and the inner region comprises coarse precipitates.