Impact fracture behavior of annealed high density polyethylene (HDPE) has been studied. Charpy impact test results show that annealing increases the total fracture energy of HDPE and also that the increase in fracture energy is mainly due to the increase in the propagation energy with annealing time. Microscopic studies have been carried out to elucidate the origin of the rise in the propagation energy of the annealed HDPE. It is found that as annealing time increases, microscopically, the failure is more ductile with the formation of fibrillar structure. Based on the morphological study, it is proposed that the increased toughness observed in annealed HDPE is due to the occurrence of micro-voids (or cavities) as the material yields under mode I dynamic tension. The void generation promotes the formation of fibrous structure, which absorbs greater energy than as-received HDPE.