Failure mode and effects analysis (FMEA) is one of the well-known analysis methods having an established position in the traditional reliability analysis. The purpose of FMEA is to identify possible failure modes of the system components, evaluate their influences on system behaviour and propose proper countermeasures to suppress these effects. The generic nature of FMEA has enabled its wide use in various branches of industry reaching from business management to the design of spaceships. The popularity and diverse use of the analysis method has led to multiple interpretations, practices and standards present- ing the same analysis method. FMEA is well understood at the systems and hardware levels, where the potential failure modes usually are known and the task is to analyse their effects on system behaviour. Nowadays, more and more system functions are realised on software level, which has aroused the urge to apply the FMEA methodology also on software based systems. Soft- ware failure modes generally are unknown—“software modules do not fail, they only display incorrect behaviour”—and depend on dynamic behaviour of the application. These facts set special requirements on the FMEA of software based systems and make it diffi- cult to realise. In this report the failure mode and effects analysis is studied for the use of reliability analysis of software-based systems. More precisely, the target system of FMEA is defined to be a safety-critical software-based automation application in a nuclear power plant, implemented on an industrial automation system platform. Through a literature study the report tries to clarify the intriguing questions related to the practical use of software failure mode and effects analysis. The study is a part of the research project “Programmable Automation System Safety Integrity assessment (PASSI)”, belonging to the Finnish Nuclear Safety Research Pro- gramme (FINNUS, 1999–2002). In the project various safety assessment methods and tools for software-based systems are developed and evaluated. The project is financed together by the Radiation and Nuclear Safety Authority (STUK), the Ministry of Trade and Industry (KTM) and the Technical Research Centre of Finland (VTT).