Failure assessment of steam generator tube are very important for the integrity of energy plants. In pipes of energy plants, sometimes, the local wall thinning may result from severe erosion-corrosion damage. Recently, the effects of local wall thinning on fracture strength and fracture behavior of piping system have been well studied. In this paper, the elasto-plastic analysis is performed by FE code ANSIS on steam generator tube with wall thinning. We evaluated the failure mode, fracture strength and fracture behavior from FE analysis. It was possible to predict the crack initiation point by estimating true fracture ductility under multi-axial stress conditions at the center of the thinned area.