A method of handling collision between PDU session establishment and PDU session release procedures is proposed. At UE side, a UE first initiates a PDU session establishment procedure to establish a PDU session having a PDU session ID. If UE receives a PDU session release command message on the same PSI, UE should ignore the PDU session release command message, and proceed with the PDU session establishment procedure. At NW side, a network entity initiates a PDU session release procedure to release a PDU session having a PDU session ID. If the network entity receives a PDU session establishment request message from UE on the same PDU session ID, the network entity should locally release the PDU session and proceed with the PDU session establishment procedure.