In this paper, a unified methodology based on the local stress concept to estimate residual strength of locally thinned pipes. An underlying idea of the proposed methodology is that the local stress in the minimum section for locally thinned pipe is related to the reference stress, popularly used in creep problems. Then the problem remains how to define the reference stress, that is the reference load. Extensive three-dimensional finite element (FE) analyses were performed to simulate full-scale pipe tests conducted for various shapes of wall thinned area under internal pressure and bending moment. Based on these FE results, the reference load is proposed, which is independent of materials. A natural outcome of this method is the maximum load capacity. By comparing with existing test results, it is shown that the reference stress is related to the fracture stress, which in turn can be posed as the fracture criterion of locally thinned pipes. The proposed method is powerful as it can be easily generalised to more complex problems, such as pipe bends and tee-joints.