Hydrogen permeation barrier plays an important role in reducing hydrogen loss from zirconium hydride matrix when used as neutron moderator. Here, a composite nitride film was prepared on zirconium hydride by in situ reaction method in nitrogen atmosphere. The phase structure, morphology, element distribution, and valence states of the composite film were investigated by XRD, SEM, AES, and XPS analysis. It was found that the composite nitride film was continuous and dense with about 1.6 μm thickness; the major phase of the film was ZrN, with coexistence of ZrO2, ZrO, and ZrN0.36H0.8; and Zr-C, Zr-O, Zr-N, O-H, and N-H bonds were detected in the film. The existence of ZrN0.36H0.8 phase and the bonds of O-H and N-H revealed that the nitrogen and oxygen in the film could capture hydrogen from the zirconium hydride matrix. The hydrogen permeation performance of nitride film was compared with oxide film by permeation reduction factor (PRF), vacuum thermal dehydrogenation (VTD), and hydrogen permeation rate (HPR) methods, and the results showed that the hydrogen permeation barrier effects of nitride film were better than that of oxide film. The zirconium nitride film would be a potential candidate for hydrogen permeation barrier on the surface of zirconium hydride.