Contemporary approach of corrosion prevention is to use internal lining system to isolate the corrosive medium from the host pipe's inner surface. The liners serve to offer a longer lifecycle of pipelines, as well as a corrosion barrier against aggressive chemical agents. A recent lining technology based on a Kevlar-reinforced flexible polymer composite liner called the InField Liner (IFL) has been successfully installed in several pipelines. It has been theorized that the added inherent strength of the liner due to the Kevlar-reinforcement can give rise to an increase in burst pressure level of the corroded pipeline. The mechanical response of the IFL liner is established accurately and used to define the constitutive behavior of the IFL material in a nonlinear finite element model of liner installed in a host pipe with internal corrosion defect. The results reveal that an increase in burst pressure is achieved with the IFL liner, which is attributed to the interaction between the IFL and the internal corrosion defect. The increase in burst pressure is especially noted for rather deep and short length defects. The primary reason to the increase is the stretch of the Kevlar fabric into the defect cavity inducing a load transfer between the liner and pipe at the defect zone. A closed-form solution is developed, which can be used to assess the increase in burst of pipelines containing internal corrosion defects when rehabilitated with an IFL liner. The results of the study demonstrate that the IFL internal lining technology can be used as a corrosion barrier in steel pipelines for rehabilitation of old pipelines, as well as providing an increase in burst pressure level when the liner is installed due to its complex interaction with the internal corrosion defect.