In a mechanical assembly, errors arising from part manufacturing or assembly process may cause significant variation in final assembly with respect to the ideal model and affect the quality and performance of product. In sheet metal products due to high order of compliancy of components, errors generated during assembly process are as important as parts’ manufacturing tolerances. Therefore, it is crucial to have a comprehensive model in order to analyze the assembly process of these structures and represent the relationship between part tolerances and final assembly errors. However, it should be noted that assembly processes are often complex and nonlinear in nature. In sheet metal structures, the most important factor that makes the assembly process nonlinear is contact interaction between mating parts during assembly. If this factor is disregarded and the assembly process is only represented based on linear force-displacement relationship, the model will result in part penetration and a remarkable difference between theoretical and experimental results will occur. Another important feature in sheet metal tolerance analysis is the surface continuity of components which makes the deformation of the neighboring points of a plate correlated. This paper aims to present a new methodology for tolerance analysis of compliant sheet metal assemblies in which a nonlinear finite element analysis is integrated with improved sensitivity-free probability analysis in order to account ...