Thin walled calandria tubes for pressurised heavy water reactors are manufactured either by seam welding of Zircaloy-4 sheets or by seamless route. In the present study, the effect of processing on the critical properties such as texture, microstructure, hydriding behaviour and residual stress for both the routes as well as the mechanical anisotropy developed due to seam welding are investigated. The properties of the seam welded tube in the fusion and adjoining region are markedly different from the base material and from the seamless tube. Residual stress measurements indicate that heat affected zone (HAZ) of seam welded tubes have longitudinal tensile residual stress and the seamless tubes have uniform compressive stress along the circumference. The phase transition in the presence of residual stresses due to thermal gradient is found to modify the texture in the HAZ. The hydride orientation and mechanical anisotropy in these regions are found to be dependent on the texture of the material. © 2003 Elsevier Science B.V. All rights reserved.