A coupled thermal-mechanical model was developed to investigate the failure mechanisms of the permafrost coastal bluff in Utqiaġvik, Alaska. This model consists of a heat transfer component and a mechanical component. The former accounts for pore-ice phase change and thaw-induced variations in thermal properties. The latter incorporates thaw-induced reductions in soil cohesion and elastic modulus. The proposed model captures the evolution of the failure zones during thawing. The results reveal two primary weak zones: an upper zone near the ground surface characterized by tensile stresses, and a lower zone near the bluff’s toe dominated by compressive stresses. During thawing, the upper weak zone propagates downward, while the lower weak zone extends upward. Both failure area and maximum tensile stress increase as thaw progresses.The impacts of thermoerosional niche growth, surface cracks, and ice wedges on bluff stability were systematically analyzed. Niche length growth significantly enlarges failure areas and elevates tensile stress. Surface cracks alter weak zone geometry near the ground surface and increase the failure area by up to 1.4 times at a thaw thickness of 0.74 m. Although the presence of ice wedges initiates failure along the ice wedge–permafrost interface, their overall impact on total failure area is minimal.