Non-destructive testing (NDT) plays an important role in the safety and integrity of the large industrial structures such as pipelines in nuclear power plants (NPPs). The pulsed eddy current (PEC) is an electromagnetic NDT approach which is principally developed for the detection of surface and sub surface flaws. In this study a differential probe for the PEC system has been fabricated to detect the wall thinning in insulated steel pipelines. The differential probe contains an excitation coil with two hall-sensors. A stainless steel test sample was prepared with a thickness that varied from 1 mm to 5 mm and was laminated by plastic insulation with uniform thickness to represent the insulated pipelines in the NPPs. Excitation coil in the probe is driven by a rectangular current pulse, the resultant PEC response which is the difference of the two hall sensors is detected. The discriminating features of the detected pulse, peak value and the time to zero were used to describe the wall thinning in the tested sample. A signal processing technique such as power spectrum density (PSD) is devised to infer the PEC response. The results shows that the differential PEC probe has the potential to detect the wall thinning in an insulated pipeline of the nuclear power plants (NPPs).