Hydrogen, oxygen, nitrogen and other gas impurities can be easily absorbed by zirconium alloys above 300 ℃ during the laser welding process, thus the mechanical property is drastically reduced. The key to ensuring the quality of zirconium alloy welding is to establish reasonable welding process parameters and strengthen the isolation protection for the welding seam and heat affected zone. Laser butt welding test on the 0.7 mm Zr-Sn-Nb-Fe alloy sheet with fiber laser as thermal source is carried out. Based on the ANSYS software, a nonlinear three dimensional (3D) transient heat conduction model is established by means of the finite element analysis. Simulation is done to get the temperature field distribution of the Zr-Sn-Nb-Fe alloy thin sheet. The results show that the weld profile and dimension obtained by simulations are basically consistent with those of the real welds, which verifies the rationality of adopting Gaussian heat source model to simulate the temperature field of Zr-Sn-Nb-Fe alloy thin sheet by laser butt welding. The temperature field presents a stable meteor-shaped distribution, the isotherms are dense near the weld, and the heat affected zone is narrow. The width of the area above 300 ℃ increases with the increment of laser power, but decreases with the increment of the welding speed. When the laser power is 1300~1500 W, the welding speed is 50~70 mm/s, the defocusing amount is +1~+2 mm, and the argon gas protection nozzle diameter is 8~12 mm, the tensile strength of Zr-Sn-Nb-Fe alloy welded specimens roughly equals to that of the base metal. The weld quality is good, air holes and cracks do not exist, the grain is small, and the contents of the main elements have no obvious changes if compared with that of parent metal. The welded specimens with a high mechanical property are obtained.