The effect of microstructural evolution on superplastic deformation parameters, such as the nature of σ-̇ε plots, strain-rate sensitivity parameter, and activation energy, were studied for unstable and thermally stable microstructures of a Zr-2.5 wt pct Nb pressure-tube alloy. Two types of differential strain-rate tests (increasing temperature (IT) and decreasing temperature (DT), in the temperature range of 610 °C to 810 °C at 20 °C intervals) were conducted within a strain-rate range of 10-5 to 10-3 s-1. Single specimens were used to obtain the σ-̇ε plots for all the test temperatures in the aforementioned temperature range. The effect of orientation (with respect to the axial direction of the tube) on the superplastic deformation parameters was also studied. The microstructural evolution was studied along the three orthogonal planes of the tube by water quenching undeformed samples in the beginning of differential strain-rate tests at each test temperature. The observed apparent activation-energy values associated with deformation were in the two distinct ranges of 287 to 326 and 151 to 211 kJ/mole. In the temperature range of 730 °C to 810 °C, the apparent activation-energy value depended on the direction of approach of the test temperature. The mechanisms of superplastic deformation in this alloy were found to be dislocation climb-controlled creep in region III and grain-boundary sliding accommodated by grain-boundary diffusion or lattice diffusion in the α or β phases in region II. Based on the observed microstructural features, a model to explain the σ-̇ε plots and apparent activation energy has been proposed.