Fourier-transform infrared (FTIR) spectroscopy has been applied in combination with wide-angle X-ray diffraction and measurements of strength, fluidity, yellowness, birefringence, and moisture regain to detect microstructural changes in lyocell fibres, a regenerated cellulose fibre, subjected to direct heat and annealing treatments. TMA, and SEM were used to show the effect of direct heat and annealing on lyocell fibres. The FTIR spectroscopy results show that a decrease in intermolecular hydrogen bonding occurs at 70 and 80 °C for annealed and directly heated samples, respectively. The results demonstrate increase of the intensity of O-H stretching vibrations, this associated with hydrogen bonds reforming around 130 °C. Lyocell fibres shrink with direct heating in the temperature range 130-160 °C. The crystallinity decreases gradually with increasing temperature. There is no significant change in colour of the samples annealed up to 150 °C. A continuous increase in the fluidity occurs for the annealed samples in the range 150-230 °C. The tenacity and breaking extension of heated samples decrease with increasing temperature. The lower annealing temperatures cause no observable change in the smooth and void-free surface, but in the annealing temperature range 170-230 °C, substantial non-uniformity is apparent on the surface of the fibres. © 2005 Elsevier Ltd. All rights reserved.