Nb/NiZr composite alloy membranes have been reported to have hydrogen permeabilities higher than that of pure Pd. Since the hydrogen permeation behaviour in these composite alloys is highly microstructure sensitive, hydrogen permeability is likely to depend on annealing conditions. This work has looked into the effect of annealing on the hydrogen permeability of as-cast Nb-Ni-Zr alloys with the goal of helping in the advancement of Nb-based alloy membranes as cost-effective alternatives to the Pd-based alloy membranes used for hydrogen purification. Nb-Ni-Zr alloy ingots of different compositions were prepared by argon arc-melting. The samples were vacuum sealed in quartz tubes and annealed isochronally for 1h between 500°C and 900°C. It was found that the samples annealed at 900°C exhibit higher hydrogen permeability than the as-cast samples. However, these samples were found to be less resistant to hydrogen embrittlement and the membrane exhibited cracks after the permeation test. The main mechanical failure mechanism was due to intragranular cracking for the alloys with high Nb content whilst the mechanism was observed to be intergranular cracking for alloys with lower Nb-content. The mode of failure did not change after annealing.