We calculate the two-particle local correlation for an interacting 1D Bose gas at finite temperature and classify various physical regimes. We present the exact numerical solution by using the Yang-Yang equations and Hellmann-Feynman theorem and develop analytical approaches. Our results draw prospects for identifying the regimes of coherent output of an atom laser, and of finite-temperature "fermionization" through the measurement of the rates of two-body inelastic processes, such as photoassociation.