Abstract: A 38CrMoAlA clutch gear of engine was found to have 3 magnetic mark defect display at the rod near the end surface by magnetic particle inspection after testing. In order to find out the failure mode and cause, micro and macro observation, microstructure examination, and chemical composition analysis were performed, and simulation testing were carried out with a new gear. The results show that magnetic mark defect display was due to the cracks there. The cracks initiated under the co-effect of residual stress induced during grinding process and the working stress during testing. The failure can be prevented by improving machining process and adopting low-temperature tempering.