The Zircaloy-3 corrosion problem is associated with white or tan stringers found in the black matrix oxide of Zircaloy-3 samples corrosion tested for 14 days in 750 deg F steam. The stringers are parallel to the direction of rolling. A similar effect is noted in the cladding of corrosion tested fuel elements manufactured from strip showing this behavior. Because the stringers are noted in the fuel elements and could lead to possible difficulties, an investigation was begun to determine the reasons for the stringers and to determine methods for eliminating them. (auth)