Two types of flow-assisted corrosion were observed at advanced test reactor (ATR) during PALM Cycle 153B-1 (April 2013): pitting corrosion and flow-assisted erosion corrosion. In this paper, a description of the corrosion is provided along with the results of thermodynamic, kinetic, neutronic, and thermohydraulic modeling. Together, these results provide a plausible explanation and means of corrosion remediation in the future. Cycle 153B-1 was a typical operating cycle for the ATR and did not result in any unusual plant transients. However, when the fuel elements were removed from the core and inspected, several thousand flow-assisted corrosion pits and “horseshoeing” defects (erosion corrosion) were readily observed on the surface of the several YA-type fuel elements. A thermohydraulic model of coolant in channel 20 (near a YA fuel element and the Be neutron reflector) was generated and helped to establish that the horizontal saw cuts in the Be neutron reflector had a significant effect on the temperature of the coolant. Horizontal cuts in the beryllium reflector block were created to arrest the propagation of large vertical crack(s) in Be. The flow was turbulent, rather than varying linearly with gradual heating of the coolant as it passed through the channel. The temperature rise was represented by a series of “humps,” which occurred at each horizontal saw cut in the beryllium reflector block. Each of the 13 saw cuts had a chamfered edge which resulted in the coolant flow being redirected as a jet across the coolant channel into the surface of the EE (i.e., a plate without nuclear fuel) plate. This explained the temperature rise and the observed scalloping and pitting degradation on the YA-M fuel elements. In the case of scalloping (horseshoeing), a surprising similarity of this defect to those appearing on aluminum plates rolled in overlubrication conditions was established. The neutronics data for modeling were provided using advanced irradiation simulations (MCNP, HELIOS). The following corrective measures were proposed based upon the results of JMatPro v.8.2 modeling (TTT and CCT diagrams): change the fabrication process by adding blister anneal before program anneal immediately after cold rolling of AA6061 plate. This step allows achieving complete recrystallization and eliminates strengthening due to metastable precipitates.