The substrate effects on indentation behaviour of thin films are analysed using finite element (FE) method. There is no universal critical penetration depth beyond which the substrate effects come in. The critical penetration depth is dependent on the combination of the film and the substrate and more sensitive to differences in the elastic properties than in the plastic properties of the film/substrate system. The FE simulation results of the effects of the substrate on the elastic modulus and the hardness of the film/substrate system have also been compared with the empirical models of Doerner and Bhattacharya, respectively. (C) 2003 Elsevier B.V. All rights reserved.