Abstract: This paper presents an efficient method of "equivalent workstation" for modeling and analysis of multistage transfer lines with unreliable machines and finite buffers. The random processing times for discrete parts and random failure and repair times for machines are assumed. The unrelible machines and their random processing times lead to blockage and stavation in operation due to limited storage capacities. This makes the problem of modeling and analysis very difficult to treat as they require large state spaces and can't be decomposed exactly. In this paper a single buffer between two reliable workstations is analysed first. Then an equivalent workstation without starvation and blockage is constructed. Thereafter connecting all the equivalent workstations in series we get the "equivalent transfer line." A set of performance measures such as the production rates, efficiencies and average inventory levels are derived in explicit analysical expressions. Finally two numerical examples are given for comparing the calculated results with those of Y. F. Choong & S.B. Gershwin, Ref. [10].