This study was aimed at investigating the role of crack initiation and growth rate on the fatigue life reduction by environmental effect. First, crack length and the number of cracks were observed on the inner surface of specimens after fatigue test in PWR environment and air. Next, incubation time was deduced by inverse analysis. Third, statistical crack initiation and growth behavior was simulated by a Monte Carlo model. The influence of multiple crack interaction and coalescence to the fatigue life were discussed. It was revealed that environmental effect enhanced crack initiation and accelerated crack growth. Moreover, coalescence of cracks was estimated to influence fatigue life of 316 stainless steel in PWR environment.