Abstract: Functional failure becomes an important factors in natural circulation system operation failure, which needs to be considered in the system reliability analysis. However, the reliability evaluation work of these passive systems is still in the primary stage. In this paper, based on the passive functional reliability evaluation process, the physical process of passive natural circulation was simulated by RELAP5 program and the reliability on capacity of natural circulation cooling in Xi'an Pulsed Reactor (XAPR)reactor core was estimated. Combined with middle loss of coolant accident, the functional failure criteria was established based on the integrity of fuel claddings and the key parameters of natural circulation were identified. According to Latin Hypercube Sampling, sensitivity assessment and functional reliability evaluation were carried out. Then the functional reliability evaluation results can be integrated in the Probabilistic safety accessment (PSA) model. The results show that XAPR PSA not only analyzed the hardware reliability but also considered the functional reliability, to better guide the XAPR operation and improve the safety.