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Increases to reactor power cause fuel pellet thermal expansion which can impose strain generating high stresses in the cladding and potentially lead to a breach in the fuel system. This phenomenon is known as a pellet-cladding interaction and the stress accumulation and retention during such an event is highly relevant to the fuel performance. This dissertation investigates the anisotropic deformation mechanisms controlling mechanical behavior of cold-worked stress-relieved Zircaloy-4 under pellet-cladding interaction conditions through mechanical testing, microstructure characterization, and stress analysis. Two loading modes are used to compare the effects of different stress states. These include axial tension which is commonly used to measure the mechanical properties, and internal pressurization loading which better simulates pellet-cladding loading conditions. It is hypothesized that the cladding subjected to internal pressure loaded will display enhanced stress relaxation due to increased stress and defect accumulation during loading and more competitive slip system activity during relaxation. Results confirm these hypotheses and find that the rate-limiting deformation mechanism during relaxation is screw dislocation glide on prismatic planes limited by edge dislocation jog and dipole climbing on basal planes. Differences in stress and defect accumulation are observed and do affect the stress relaxation behavior, but the dissertation finds that the primary reason for enhanced relaxation is because internal pressure loading imposes higher resolved shear stresses on basal slip systems which accelerates the rate-limiting deformation mechanism.