Abstract: Mechanical properties of the yielding layer have great influence on the internal water pressure on steel liners and their surrounding concrete in penstocks of hydropower station. This paper frist gives a review on the existing analytical solutions for internal water pressure transmission coefficient, and points out their drawbacks, such as the neglect of material nonlinearity and residual strain of yieldinglayer, and the gaps between steel pipe, cushion layer and surrounding concrete. Then, we present a new analytical solution considering the gaps and material nonlinearity and its verification and application in an example calculation. This study comes to the conclusions that an effective stiffness of the yieldinglayer can be defined and calculated by using a ratio parameter of effective compressive modulus over effective thickness, and that at constant effective stiffness the pressure transferred to the concrete is also constant. This work is useful for selection of material and geometrical parameters of the yielding layer.