Stacking faults (SFs) in secondary phase particles (SPPs), which generally crystallize in the Laves phase in Zircaloy-4 (Zr-4) alloy, have been frequently observed by researchers. However, few investigations on the nano-scale structure of SFs have been carried out. In the present study, an SF containing C14 structured SPP, which located at grain boundaries (GBs) in the α-Zr matrix, was chosen to be investigated, for its particular substructure as well as location, aiming to reveal the nature of the SFs in the SPPs in Zr-4 alloy. It was indicated that the SFs in the C14 structured SPP actually existed in the local C36 structured Laves phase, for their similarities in crystallography. The C14 → C36 phase transformation, which was driven by synchroshearing among the (0001) basal planes, was the formation mechanism of the SFs in the SPPs. By analyzing the strained regions near the SPP, a model for understanding the driving force of the synchroshear was proposed: the interaction between SPP and GB resulted in the Zener pinning effect, leading to the shearing parallel to the (0001) basal planes of the C14 structured SPP, and the synchroshear was therefore activated.