The pulsed eddy current (PEC) technique is widely used to detect and quantify flaws in conducting plates .This method has been used to test materials subjected to heat treatment. Material properties such as conductivity show a marked change with temperature. As the heat diffuses into the material, the probe output changes owing to the changing material properties. Hence, it becomes difficult to obtain consistent results when searching for defects. Such problems can be effectively tackled by combining thermal and pulsed eddy current analysis for getting a reference data for the signals acquired from the probe. In this paper, a model is presented which combines transient thermal analysis and PEC Finite Element Model to track the probe output changes occurring during Laser based heat treatment of thin sheet conducting materials. The first step encompasses modeling of the laser treatment process using a three dimensional Finite Difference method .Properties of the material such as conductivity and specific heat capacity changes with temperature. Such parameters can be averaged over the temperature range of the laser treatment process and used in the model. The thermal model can also be extended to heterogeneous materials like Carbon reinforced composites. The temperature distribution in the material which is obtained from the thermal model is used as the input data for the axisymmetric PEC Finite element analysis. Hence the probe output can be tracked over the entire time interval. This forms an effective basis for combining the physics of two diffusive phenomena, i.e. thermal and pulsed eddy current in the NDE and control of such processes. © 2003 American Institute of Physics