This paper investigates distortions and residual stresses induced in butt joint of thin plates using Metal Inert Gas welding. A moving distributed heat source model based on Goldak's double-ellipsoid heat flux distribution is implemented in Finite Element (FE) simulation of the welding process. Thermo-elastic-plastic FE methods are applied to modelling thermal and mechanical behaviour of the welded plate during the welding process. Prediction of temperature variations, fusion zone and heat affected zone as well as longitudinal and transverse shrinkage, angular distortion, and residual stress is obtained. FE analysis results of welding distortions are compared with existing experimental and empirical predictions. The welding speed and plate thickness are shown to have considerable effects on welding distortions and residual stresses.