Within the framework of the French DENOPI project dedicated to the study of Spent Fuel Pool accidents, the high temperature degradation of Zircaloy-4 cladding material has been investigated in the 700–950 °C range, in air and air-steam atmospheres. In particular, we focused on the effect of the pre-transient corrosion-oxide scale formed on the cladding materiel during in-reactor use, here simulated by an out-off-pile low-temperature pre-oxidation step. In-situ X-Ray Diffraction evidenced strong evolutions of the stress state and grain size of these laboratory-grown pre-oxidation scales upon high temperature exposures. From 18O tracer experiments and thermogravimetric analysis, the pre-oxide was shown to be a rather efficient barrier against further high temperature attack by the nitrogen-containing atmosphere, despite its multi-layered, porous microstructure. Oxygen apparent diffusion coefficients were derived from the 18O tracer experiments. These diffusion coefficients suggest that the pre-oxide rather behaves like a dense monoclinic zirconia layer. The protective effect was sometimes observed to be maintained during very long exposure times at high temperature, depending on the presence of defects in the scale. Where the protective effect was first lost, the nitrogen-“catalyzed” oxidation initiated and progressively propagated to the whole specimen surface. A propagation mechanism is proposed, which involves progressive mechanical failure of the pre-oxide scale, below which the high temperature, nitrogen-assisted, porous oxidation formation occurs. The cladding degradation kinetics, driven by this propagation mechanism, is only weakly affected by the presence of steam. However, where the porous oxide formed, strong hydrogen pick-up in the underlying metallic substrate was observed.