Functional modeling is the key step in product design process. To improve the quality of functional modeling, an identification method of key elemental function based on function-failure knowledge was proposed. A function-failure knowledge model for mechanical product was built, which consists of function-failure mode, relationships among failure modes, and failure risk information. By means of the function-failure repository, the approach to calculate risk number (RN) of the elemental function was presented, in which the relationships among failure modes were considered. Then the key elemental functions were identified by the RN value. Finally, a case was studied to illustrate the proposed method.