Variations of the geomagnetic field drive geomagnetically induced currents (GIC) in the buried steel pipelines, which may contribute to the pipeline corrosion and the pipeline network interfered by the solar wind and magnetic storm, are actually a complex nonlinear dynamical system. This paper shows that the induced current in the buried steel pipeline system has chaotic characteristics. To prove this, we first establish the lump-constant geomagnetic interference model based on the distributed source transmission line theory. Then we analyze this model by using Melnikov method and find out the condition under which the chaotic phenomenon will occur. In order to get a sufficient proof to validate the existence of chaos in pipelines, we also obtain the actual GIC time series by utilizing the measured data provided by national geomagnetic observatory and analyze its chaotic characteristics using multiple chaotic criteria. Analysis results of both the model and the measured data indicate that the pipeline's GICs have chaotic characteristics. This provides a theoretical basis for protecting pipeline from the effects of space weather.