RNA-Seq is increasingly being used for gene expression profiling. In this approach, next-generation sequencing (NGS) platforms are used for sequencing. Due to highly parallel nature, millions of reads are generated in a short time and at low cost. Therefore analysis of the data is a major challenge and development of statistical and computational methods is essential for drawing meaningful conclusions from this huge data. In here, we assessed three different types of normalization (transcript parts per million, trimmed mean of M values, quantile normalization) and evaluated if normalized data reduces technical variability across replicates. In addition, we also proposed two novel methods for detecting differentially expressed genes between two biological conditions: (i) likelihood ratio method, and (ii) Bayesian method. Our proposed methods for finding differentially expressed genes were tested on three real datasets. Our methods performed at least as well as, and often better than, the existing methods for analysis of differential expression.