With the trend to be smaller, more integration and higher power in power electronic technology, the cooling problem has become increasingly prominent for those high power devices. Micro-channel in substrate, as an effective cooling method, has been proposed and investigated by many researchers in recent years. Warpage and stress, naturally existing in all the packaging processes due to the unavoidable mismatch of coefficient of thermal expansion (CTE) between materials, can be problematic on reliability. Compared to the traditional substrate, the substrate integrated with micro-channel maybe result in the increase of the warpage and residual stress after packaging processes. In this paper a 1200V Insulated Gate Bipolar Transistor (IGBT) module as a prototype was investigated to describe effects of the microchannel on warpage and residual stress of the substrate due to reflow process. Finite element analysis method with viscoplastic solder model was used to study the reflow process. The Anand constitutive model, which has been adopted successfully to represent the viscoplastic behavior of solder materials, was used to model the material properties of SAC305 solder layers in this study. The whole reflow process was modeled by element "death and activation" technology, and the traditional substrate model and the model of the substrate integrated with microchannel were taken for comparison. The effect of the size and the arrangement of the micro-channel in substrate on warpage and residual stresses after reflow process were also studied.