Failure of thermal barrier coating (TBC) system is associated with the morphological imperfection of thermally grown oxide (TGO) layer. The objective of this work is to numerically investigate the crack nucleation and propagation in TBC system upon thermal cycling based on a cohesive zone model, in which TGO thickness imperfection effect is incorporated. The results show that TGO/BC (bond coat) interface is subjected to high tensile stress in the vicinity of TGO thickness imperfection during thermal cycling, thereby inducing crack nucleation. Owing to the plastic deformation of BC, fracture behavior of TGO/BC interface is related to BC yield strength for a typical thermal growth rate of TGO. Furthermore, the embedded oxide in BC could be also ruptured as a result of the increasing transverse stress, which will lead to the coalescence of adjacent cracks.