The stress-strain responses and oxidation properties of cold-rolled Zr-1.5Nb-O and Zr-1.5Nb-O-S alloys were studied. The U.T.S. (ultimate tensile strength) of cold-rolled Zr-1.5Nb-O-S alloy with 160 ppm sulfur (765 MPa) were greater than that of Zr-1Nb-1Sn-0.1Fe alloy (750 MPa), achieving an excellent mechanical strength even after the elimination of Sn, an effective solution strengthening element. The addition of sulfur increased the strength at the expense of ductility. However, the ductile fracture behavior was observed both in Zr-Nb-O and Zr-Nb-O-S alloys. The beneficial effect of sulphur on the strengthening was observed in the cold rolled Zr-1.5Nb-O-S alloys. The activation volume of cold-rolled Zr-1.5Nb decreased with sulfur content in the temperature region of dynamic strain aging associated with oxygen atoms. Insensitivity of the activation volume to the dislocation density and the decrease of the activation volume at a higher temperature where the dynamic strain aging occurs support the suggestion linking the activation volume with the activated bulge of dislocations limited by segregation of oxygen and sulfur atoms. The addition of sulfur was also found to improve the oxidation resistance of Zr-Nb-O alloys.