Grade 91 steel, a ferritic‐martensitic alloy, is commonly used in thermal power and nuclear plants due to its high‐temperature, high‐pressure performance. This study analyzes the thermal and mechanical behaviour of activated tungsten inert gas (A‐TIG) welding on 4 mm‐thick Grade 91 steel using an in‐house developed oxide flux. Transient temperatures are recorded at multiple locations during welding. X‐ray diffraction is used to evaluate residual stress, with peak tensile stress near the heat‐affected zone reaching 471 MPa. The A‐TIG process yields deep penetration and narrow weld beads due to high heat intensity. A finite element simulation incorporating a combined heat source model (conical and double ellipsoidal) is used to predict temperature, stress, and distortion. Longitudinal distortion predictions are compared with experimental results, showing good agreement. Distortion analysis using various theories confirms the accuracy of the simulation. Phase transformations from ferrite to austenite and then to martensite are included in the model, enhancing prediction accuracy. The combined model with large deformation and phase transformation effects provides results closely matching experimental data for both thermal and mechanical responses.