Zirconium alloys are considered as important nuclear reactor structural materials owing to their low thermal neutron absorption cross-section, good corrosion resistance, and good mechanical properties in high-temperature and high-pressure water. However, under high temperature and corrosion conditions, an oxide film forms on the surface of zirconium alloys, and its growth rate increases rapidly when the thickness is 2-3 μm, leading to a transition in corrosion kinetics, which limits its service life in the reactor. In this study, the transformation of zirconia from tetragonal (t-ZrO₂) to monoclinic (m-ZrO₂) and the crack propagation behavior in the oxidation layer on zirconium alloys have been investigated using phase-field simulation. During the transformation of t-ZrO₂ to m-ZrO₂ in the oxide film, the t-ZrO₂ matrix undergoes compressive and tensile stresses along the long and short axes of the m-ZrO₂ precipitate, respectively, whereas the m-ZrO₂ precipitate primarily undergoes compressive stress during the transformation. Moreover, the stresses increase with the growth of the m-ZrO₂ grains. The simulations of crack evolution reveal that the cracks in the oxidation layer parallel to the oxide-metal interface expand under applied tensile stress perpendicular to the interface. Such cracks may connect with other isolated cracks and defects forming a defect layer. Upon extending to the oxide-metal interface, surface cracks perpendicular to the interface bifurcate in the oxide rather than penetrate into the metal matrix, which facilitates the peeling off of the oxidation layer from the substrate.