Abstract Tests have been carried out to study the ultimate moment and incremental tendon stress of steel–concrete composite beams prestressed with external tendons under positive moment. It appears that adding prestressing by external tendons of the composite beams can significantly increase the yield load and the ultimate resistance of the beams. The deflection at the serviceability state is also reduced. However, a substantial incremental stress will develop in the tendons at the ultimate state. On the basis of the compatibility of the tendons and the composite beam at the anchorage section, and equilibrium of the internal force, the neutral axis equation of the composite beam section at the ultimate state is derived. The simplified expressions for the ultimate incremental tendon stress related to the ultimate span/deflection value for four typical external tendon cases are developed. The results compare well with the test results and the finite element analysis. A simplified method for predicting the ultimate incremental tendon force and the load carrying capacity of the composite beams prestressed with external tendons is proposed.