The mechanism of stress corrosion cracking(SCC) of Zircaloy-4 in iodine vapour has been studied by the constant elongation rate test method and U-bend test method. SCC tests were conducted in the iodine vapour with the concentration of 3 mg/ml at the temperatures between 300℃ and 350℃. In order to investigate the effects of stress states on the SCC behaviour, three kinds of specimens were machined from annealed Zircaloy-4 plates. In the uniaxial tension specimens and single edge notched(SEN) ones which are both under the plane stress conditions, SCC did not occur. However, SCC occurred in the specimens under the plane strain condition. As the elongation rate was lowered, the susceptibility to SCC was increased. SEM examination of the fracture surfaces showed that the stress corrosion cracks propagated with transgranular brittle fracture mode for annealed plane strain tensile specimens and U-bend specimens, and intergranular and transgranular mixed brittle fracture mode for re-annealed plane strain tensile specimen. The mechanism of iodine-induced Zircaloy SCC was discussed in terms of the effects of stress state, elongation rate and yield stress. The present experimental results well support the iodine-diffusion model, however, iodine-adsorption model can not be completely excluded.