This paper presents a novel approach for the determination of the loss of composite action for timber composite systems using only measurements from non-destructive vibration testing. Traditionally, the composite action of a system is evaluated from static load testing using deflection measurements. However, static load testing is expensive, time consuming and inappropriate for existing flooring systems. The method proposed in this paper is based on the Damage Index (DI) method, which uses changes in modal strain energies, to detect locations and severities of damage. In the proposed method, a new Loss of Composite Action Index (LCAI), which is derived from direct mode shape measurements obtained from dynamic testing, is introduced to evaluate the loss of composite action. The proposed method is tested and validated on numerical and experimental models of a timber composite beam structure, which consists of two timber components that are connected with different numbers of screws to simulate various degrees of partial composite states. The results obtained from the new method are very encouraging and show a clear trend of the proposed dynamic-based LCAI in indicating the loss of composite action in the investigated timber composite structure.