This paper presents the results of a study whose objective was to investigate the behaviour of a hybrid wood shearwall system defined herein as a combination of traditional light-frame wood shear walls with post-tensioned rocking cross laminated timber (CLT). The post-tensioned CLT panels in the hybrid system offer both vertical and lateral load resistance and self-centering capacities. The traditional light wood frame shearwalls (LiFS) provide additional lateral load resistance along with energy dissipation through the slip of nail connections. Thus a combination of these two types of structures will provide an excellent structural solution for mid-rise to tall wood buildings, where there is a need for resisting large lateral and vertical loads as well as structural stability. A conventional test on the hybrid system subjected to a reverse-cyclic loading protocol and a real-time hybrid simulation using the new algorithm were conducted. In real-time hybrid simulation, a three-story building was modelled as a numerical substructure. In the first story of the three-story building the experimental CLT-LiFS substructure was tested and integrated in real time with the numerical substructure as described herein. The experimental observation of the behaviours and damage of the hybrid shear wall are presented and discussed in this paper.