The reeling technique presents an economical pipeline installation method for offshore oil and gas applications, especially for thick-wall (low D/t) pipelines. During reeling, the pipe is subjected to large plastic bending strains up to 3%. In thick-wall pipes, the tensile fracture response of the pipeline/girth weld would normally be the governing limit state. Seamless line pipes are preferred for the reeling applications in which the Luders plateau is often exhibited in materials stress-strain response. In this paper, the fracture response of such pipelines is investigated from a continuum perspective using a nonlinear 3D finite element analysis. A typical pipeline with a hypothetical defect is considered, with the material having a range of Luders strains and strain hardening indices. Results show that the Luders plateau modifies the shape of the moment-strain response curves of the pipe, as well as the J-integral fracture response. It is observed that the response is always bounded between two limiting material models, which are (i) the elastic-perfectly plastic stress-strain response and (ii) the conventional elastic-strain hardening plasticity response, without a Luders plateau. Also, the Luders plateau was observed to decrease the crack opening stress ahead of the crack tip and thus the crack tip constraint. On the other hand, the presence of a Luders plateau elevates the near tip plastic strain and stress triaxiality fields, thus promoting ductile fracture. A micromechanical damage integral model coupled with a modified boundary layer analysis was incorporated to study this aspect. Based on the findings of this study, it is believed that the presence of Luders plateau could significantly alter the fracture response and toughness of pipes subject to relatively high strains. [DOI: 10.1115/1.4002930]