Evolution of dislocation structure as a function of deformation, in case of a two phase zirconium alloy, was characterized by transmission electron microscopy as well as X-ray line profile analysis. Dislocation structures up to a deformation of 10% show that deformation is mitigated by a single active slip system. Dislocation cellular structures were observed at a deformation of 27%. Two different X-ray based techniques of evaluation of dislocation density were used in the present study. The methods though differed in the absolute values of dislocation densities (ρ), agreed with each other in terms of trend in variation of ρ with the amount of plastic strain.