In this paper, the tensile models of the negative Poisson’s ratio yarn with incompressible component yarn and compressible component yarn are constructed. The theoretical Poisson’s ratio curves exhibit the same trend as the experiment. Compared with the theoretical model of incompressible component yarns, a 14% reduction was found in the maximum negative Poisson’s ratio value in the compressible component yarns model. Additionally, the modified theoretical model was established to improve further the accuracy of the model. Both the variation trend and Poisson’s ratio value of the theoretical curves are highly consistent with the experimental results, and the average difference rate of the maximum Poisson’s ratio value is below 10%, which proves the effectiveness of the corrected theoretical model in predicting the auxetic behavior. Our theoretical model not only considers the initial helical path of the wrap yarn could not be completely horizontally straightened when it is just subject to an axial tensile force but also takes the influence of component yarn sectional shape changes into account. The as-constructed theoretical model is more realistic and can guide the design of negative Poisson’s ratio yarn and optimize the theoretical modeling method.