In order to clarify the small scale yielding condition in magnesium alloy, FEM analysis of the R-curve whose shape is considered to be the material characteristic shape was carried out. As an object material, magnesium alloy AZX312 was used. From the FEM analysis results, the shape of the R-curve of its first step when an initial crack size α= 200 μm is obviously different from those of α= 900μm and α= 2000μm. It is considered that the transition crack size from the small scale yielding to the large scale yielding may be between 200 μm and 900 μm. However, the threshold crack size given by the ASTM standard E399 is much larger than 900μm. The ASTM standard is based on experimental results of many materials, however, the standard does not consider the difference of Young's modulus of each materials. So, in magnesium alloy whose Young's modulus is low, the ASTM standard is considered to be not effective.