Embodiments relate to the field of wireless communications technologies, and in particular, to a session context handling method, a network element, and a terminal device. A method includes: receiving, by a session management network element, a first message that is from a mobility management network element and that is used to request to establish a session for a terminal device, where the first message carries an identifier of a data network; obtaining, by the session management network element, capability information of the data network based on the identifier of the data network; and when the capability information of the data network is that the data network supports a non-IP session, generating, by the session management network element, a non-IP session context based on an Ethernet or unstructured session context of the terminal device.