Thermal fatigue phenomenon of internal combustion engine valve seat insert (VSI) is discussed. Metallographic, microhardness mapping, and fractographic-assisted examinations along with residual stress analysis have exhibited basic characteristics of VSI thermal fatigue cracking. Based upon the results from dynamometer engine tested parts examination, the mechanism of VSI thermal fatigue crack initiation and propagation has been established. It is revealed that the propensity of a VSI thermal fatigue crack formation is related to physical and mechanical properties of VSI alloy, solidification substructure, and temperature gradient in VSI under an engine run operation condition. The assessment concept of thermal fatigue crack resistance of a VSI in this study can be adopted for engine VSI design and materials failure analysis applications.