The steam oxidation resistance of UN and UN-(20 vol%)ZrN fuel pellets is evaluated to enhance understanding of steam corrosion mechanisms in advanced nuclear fuel materials. In situ neutron diffraction shows the modified UN fuel pellets form a (U0.77,Zr0.23)N solid-solution and the sole crystalline oxidation product detected in bulk is (U0.77,Zr0.23)O2. U2N3 is not detected in significant quantities during the steam oxidation of UN or (U0.77,Zr0.23)N and stable lattice parameters show that hydriding does not take place. Steam oxidation rates, obtained via sequential Rietveld refinement show how (U0.77,Zr0.23)N has a higher activation energy (79 ± 1 kJmol−1 vs. 50 ± 5 kJmol−1), higher onset temperature (430 °C vs. 400 °C) and slower reaction rates for steam oxidation up to 616 °C, than pure UN. Throughout, both UN and (U0.77,Zr0.23)N exhibit linear (non-protective) oxidation kinetics, signifying that degradation of the fuel pellets is caused by the evolution of gaseous products at the interface followed by oxide scale spallation. This quantitative and mechanistic understanding of material degradation enables better defined operating regimes and points towards (U,Zr)N solid solutions as a promising strategy for the design of advanced nuclear fuel materials with enhanced steam corrosion resistance.