The thread ring block heat exchangers, served at the high temperature and pressure, are the key equipment in the petrochemical industry. Due to the severe operational conditions and unsuitable assemble, internal leakage problem commonly occurs, especially for the seal gasket between the tube sheet and shell. Many failed gaskets are collected. Through a series of experiments including chemical composition, metallographic analysis, SEM and fracture analysis, the gasket damage and leakage causes are analyzed. For further interpretation, the gasket stress analysis is completed by the finite element method. It shows that the gasket stress is a main factor that affects the sealing performance for the thread ring block heat exchanger. Under long term operation at high temperature and pressure, the gasket stress between the tube sheet and shell becomes loose and creep. The gasket material also deteriorates with increasing time. Therefore, in order to prevent the internal leakage, the stress should be controlled in an appropriate range. And periodical inspection must be performed.