Light-frame timber shear walls have been used as load-bearing elements in buildings for several decades. To predict the performance of such structural elements under loading, numerous analytical and numerical models have been developed. However, little focus has been on the prediction of the plastic damage behaviour and unloading of the walls. In this paper, a parametric Finite Element (FE) model is further developed by introducing elasto-plastic connectors to simulate the mechanical behaviour of the sheathing-to-framing connections. To verify the accuracy of the elasto-plastic model, full-size walls were tested and compared with results from simulations. The numerical results, from a few loading cycles, indicate that the model achieves reasonable accuracy in predicting both the nonlinear elastic and plastic deformations. Both experimental and simulation results demonstrate the importance of opening locations relating to the external racking force. The results also indicate that for a double-layer wall, its racking strength can be achieved by summation of the separate contribution from each layer. Furthermore, the internal layer was observed to contribute significantly less than the external layer since its nail pattern was based on the sheathing pattern of the external layer.