Recent interests in adopting sustainable materials and developments in construction technology have created a trend of aiming for greater heights with timber buildings. With the increased height these buildings are subjected to higher level of lateral load demand. A common and efficient way to increase capacity is to use shearwalls, which can resist significant part of the load on the structures. Prefabricated mass timber panels such as those made of Cross-Laminated Timber (CLT) can be used to form the shearwalls. But due to relatively low stiffness value of timber it is often difficult to keep the maximum drifts within acceptable limit prescribed by building codes. It becomes necessary to either increase wall sizes to beyond available panel dimensions or use multiple or groups of walls spread over different locations over the floor plan. Both of the options are problematic from the economic and functional point of view. One possible alternative is to adopt a Hybrid system, using Steel Plate Shear Walls (SPSW) with timber moment frames. The SPSW has much higher stiffness and combined with timber frames it can reduce overall building drifts significantly. Frames with prefabricated timber members have considerable lateral load capacity. For structures located in seismic regions the system possesses excellent energy dissipation ability with combination of ductile SPSW and yielding elements within the frames. This paper investigates combination of SPSW with timber frames for seismic applications. Numerical model of the system has been developed to examine the interaction between the frames and shear walls under extreme lateral load conditions. Arrangements of different geometries of frames and shear walls are evaluated to determine their compatibility and efficiency in sharing lateral loads. Recommendations are presented for optimum solutions as well as practical limits of applications.