Conventional shrinkable film is uniaxially stretched because it is required to shrink in only one direction. Therefore, tensile strength in perpendicular to stretch direction is not so high. Shrinkable film with high mechanical characteristics both in machine direction (MD) and transverse direction (TD) was developed by biaxial stretching process. Stretching in TD, annealing-1, stretching in MD, annealing-2 were performed using co-polyester as the raw material. In this process, shrinkage ratio in TD decreased as annealing-1 temperature was raised. Thus, the film which shrinks in only MD even though it was stretched biaxially was obtained. It was found the first annealing temperature was important to control the shrinkage properties. However, structural behavior with the shrinkage characteristics were unclear. This study presents the following mechanisms by density measurements (DM), small angle X-ray scattering (SAXS), differential scanning calorimetry (DSC), temperature modulated differential scanning calorimetry (TMDSC) and trans conformation by polarized Fourier transform infrared spectroscopy (FT-IR). ①Crystallinity measured by DM and DSC did not vary by annealing. However, SAXS patterns appeared and long period increased as the annealing temperature was raised. ②Amorphous fraction measured by TMDSC decreased with the reduction in shrinkage ratio in TD while crystallinity obtained by DSC did not change by annealing. ③Trans conformation in TD measured by FT-IR developed as the first annealing temperature was raised. On the other hand, trans conformation in MD was constant regardless the first annealing temperature. These three facts indicate reduction in shrinkage ratio results from micro crystallization which is detectable only by SAXS. Furthermore, TMDSC and DSC measurement suggests that oriented amorphous chains were constrained rather than crystallized. It considers that mobility of amorphous chain decreases after the thermal treatment. It corresponds to the increase in trans conformation in TD.