In the Canadian research and development program on fuel storage, used CANDU (Canada deuterium uranium) UO2fuel bundles are being exposed in experimental vessels to both dry and moisture-saturated air environments at 150°C. At intervals of several years, individual fuel elements, which were deliberately defected before storage, are recovered for destructive examination to determine the extent of UO2 oxidation that has occurred. The most recent examinations took place after 99.5 and 69 months of storage under dry and moist conditions, respectively. The progress of oxidation in the two different storage environments is compared, and the results of fuel examination by optical microscopy, scanning electron microscopy, X-ray photoelectron spectroscopy (XPS), and X-ray powder diffraction (XRD) are described. In dry air, oxidation proceeds mainly on exposed UO2 surfaces near the cladding defect and penetrates the fuel along grain boundaries adjoining cracks and the fuel-sheath gap, which provide primary pathways for access of oxygen to the fuel. An oxidized rind, resembling α-U3O7, is visible around UO2 grain cores near the oxide front. In moist air, oxidation is more generally distributed throughout the length of the fuel element. It proceeds along grain boundaries and is most extensive in regions of the fuel expected to have the highest porosity or grain-boundary inventory of fission products. This oxidized layer is too thin to observe by optical microscopy or identify by XRD, but XPS results indicate a higher degree of oxidation at the exposed grain boundaries (U6+/U4+ often »1.0) than in fuel specimens oxidized in dry air (U6+/U4+ usually <1.0). Interpretation of the results is complicated by the different O2/UO2 ratios in the two types of storage vessel and the fact that oxygen was completely consumed during at least some of the storage intervals. Nonetheless, it is clear that the presence of moisture promotes a more generally distributed oxidation of UO2 grain boundaries. The probable involvement of radiolytic processes in the moist oxidation reaction and possible reasons for the sensitization of certain regions of the fuel to moist oxidation are discussed. In addition to oxidation of UO2, the XPS spectra provide evidence for the radiation-induced incorporation of oxygen and nitrogen into adventitious carbon (adsorbed hydrocarbons) on the UO2 surfaces.