As the basic material in reactor pressure vessel (RPV), Fe endures amounts of irradiation in the entire lifetime. Many irradiation defects such as dislocation loop are generated which affect the macroscopic mechanical properties. In this paper, we use the molecular dynamics method to investigate the effect of annealing temperature on dislocation loop absorption and evolution. The annealing process contains four steps: At first, the temperature increases from room temperature (300K) to annealing temperature. The annealing temperature is set as 600K, 700K, 800K, 900K and 1000K respectively. Then the system maintains at annealing temperature for adequate time to evolve. After that, the temperature recovers to room temperature. Finally, the system evolves at room temperature to get the final configuration. The diameters of 1/2 <111> and <100> dislocation loop are 5.1 nm and 1.2 nm, respectively. The dimension of simulation cell is defined as 29.6nm × 20.2nm × 21.0nm with 1080455 atoms. Based on annealing simulation, we could obtain and analyze the microstructure evolution of dislocation loop. Apart from that, we also investigate the effect of annealing rate (4.29 K/ps, 6.00 K/ps, 10.00 K/ps and 30.00 K/ps) on the number of defect atoms and dislocation length during annealing process. Here under periodic boundary conditions the system is allowed to relax in all three directions independently. Results show that temperature has significant impact on the absorption and evolution of dislocation loop. However, temperature can improve the maximum values of defect atoms and accelerate absorption process from stage II to stage I when temperature is 900 K and 1000 K. In contrast, annealing rate has negligible impact on whether the number of defect atoms or dislocation length during the absorption and evolution of dislocation loop. These results are meaning for understanding the temperature effect on dislocation loop.