We have studied the effect of a post-weld heat treatment on plasma arc welds on Zircaloy 4 plates. The samples consist of two 100 mm long, 50 mm wide, and 6.25 mm thick plates, welded along the rolling (longitudinal) direction. The heat-treatment consisted of a steady increase in temperature from room temperature to 450oC over a period of 4.5 hours; followed by cooling with an equivalent cooling rate. Residual strains and stresses along the longitudinal, transverse and normal directions on an as-welded and a heat-treated specimen were measured by neutron diffraction on the ENGIN-X beamline at the Isis Facility, Rutherford Laboratory, UK. Peak tensile stresses of (105±25) MPa were found in the as-welded specimen, which were reduced to (70±20) MPa after the heat-treatment. Thermal compressive stresses of (-80±20) MPa were found along the normal direction, which were not affected by the heat treatment. The use of a full-pattern Rietveld refinement for the determination of bulk strains in Zircaloy specimens is also discussed.