It has been postulated that, with tensile loading conditions, micro-cracks on thin hard film act as stress concentrators enhancing plastic deformation of the substrate material in their vicinity. Under favorable conditions the localized plastic flow near the cracks may turn into macroscopic plastic strain thus affects the plasticity behaviors of the substrate. This phenomenon is analyzed quantitatively with finite element method with special attention focused on the analysis and discussion of the effects of plastic work hardening rate, film thickness and crack depth on maximum plastic strain, critical loading stress and the size of the local plastic deformation zone. Results show that micro-cracks on thin hard film have unnegligible effects on the plasticity behaviors of the substrate material under tensile loading.