The theoretical analysis of dispersion with or without stress‐induced diffusion and stress‐induced chemical reaction during laminar flow of viscoelastic fluids in capillaries is given. The results are applied to diffusion and degradation in polymers under nonhomogeneous velocity gradient fields. It is shown that the concentration profiles during dispersion are strongly dependent on axial and radial positions in the presence of stress‐induced diffusion. Stress‐induced degradation rate of macromolecules during capillary flow decreases if the macromolecules are subject to stress‐induced diffusion.