Lined pipes are Carbon Manganese pipes (backing steel) with a thin liner of corrosion resistant alloy, mechanically bonded to the backing steel. Lined pipes are cheap to produce compared to clad pipes, where the liner is metallurgically bonded to the backing steel, but they are also more complex to design for. One particularly challenging aspect is to determine load/displacement levels for potential disbondment between the liner and the backing steel. In that context, the strength of the metallurgical bond between the backing steel and the liner in a lined pipe may have an important influence. The metallurgical bond may be characterized by residual stresses in the liner and the friction coefficient between the inner surface of the backing steel and the outer surface of the liner. Current industry testing practice to determine the magnitude of residual stresses is defined in API 5LD, but these tests fail to consider boundary effects and Poisson’s ratio effects which have a substantial impact on the measured stress levels. An analytical formulation for stress levels in the liner close to free boundaries, and interaction between axial and hoop stresses are presented in this paper and validated by detailed finite element analyses. This formulation provides excellent transparency in terms of understanding which physical parameters are important in the surface interaction between the liner and the backing steel, and, among several applications, they are a highly useful tool to reinterpret the test regimes suggested in API 5LD.