The purpose of this study is to propose a safety assessment procedure for polyethylene (PE) pipe with local wall-thinning defect. A uniaxial tensile test is performed to test the mechanical performance of PE. Then, the constitutive model for PE can be established. The limit load of the PE pipe with local wall-thinning defect can be studied with the method of combining the orthogonal design of experiment and finite element (FE) analysis. Then, the factors of local wall-thinning defect can be analyzed. The results show that the depth of the defect has a great effect on the limit load (internal pressure and bending moment) of PE pipe. The effects that the axial length of the defect and the circumferential length of the defect have on the limit load are not significant. Referring to the safety assessment of metal pipe proposed by GB/T19624-2004, a safety assessment for PE pipe with local wall-thinning defect is revised.