The cross-laminated timber (CLT) technology is also perceived as a potential for utilization of lumber oflower grades and underused species, because the core layers perpendicular to the principle loading direction transferloads through rolling shear, which is not correlated to the grade of lumber. Current the product standard however specifies the minimum grade requirements for all lumber to be used as CLT laminations. In this study the effect of the presence of knots in the transverse core layer of CLT billets was examined in matched CLT samples where the heavy presence of knots in the transverse core layer was the only variable compared to knot free reference. All samples were tested as short-beams in three point bending and all failed in rolling shear in the transverse core layer. The presence of knots had no measurable effect on the shear capacity expressed as nominal MOR of the tested CLT beam samples.