The effects of the inter-annealing process on the microstructure, plane stress fracture toughness, and tensile properties of an AA7075 cladding sheet were investigated using optical microscopy, scanning electron microscopy, electron backscattered diffraction, transmission electron microscopy, and mechanical property tests. The results indicate that the plane stress fracture toughness of AA7075-T6 cladding sheet can be greatly improved. The plane stress fracture toughness for the longitudinal−transverse (L−T) and transverse−longitudinal (T−L) directions were 117.7 and 94.8 MPa·m^1/2, respectively, after intermediate annealing at 380 °C. This represents an increase of 23.9 MPa·m^1/2 in the L−T direction and 22.6 MPa·m^1/2 in the T−L direction compared with the AA7075-T6 cladding sheet without intermediate annealing. Moreover, the tensile strength remains similar under different conditions. Microstructure analysis indicates that intermediate annealing before heat treatment can result in long sub-grains, few recrystallized grain boundaries, and small size precipitates in AA7075-T6 cladding sheets.