Product performance usually degrades with time. When shocks exist, the degradation could be more rapid. This research investigates the reliability analysis when typical degradation and shocks are involved. Three failure modes are considered: catastrophic (binary state) failure, degradation (continuous processes), and failure due to shocks (impulse processes). The overall reliability equation with three failure modes is derived. The effects of shocks on performance are classified into two types: a sudden increase in the failure rate after a shock, and a direct random change in the degradation after the occurrence of a shock. Two shock scenarios are considered. In the first scenario, shocks occur with a fixed time period; while in the second scenario, shocks occur with varying time periods. An engineering example is given to demonstrate the proposed methods.