Cavity-insulated cold-formed steel (CFS) walls, with gypsum plasterboard (GP) on both sides, are widely used in the construction industry. However, their fire performance is compromised by the faster rise in the temperature of the hot flange (HF), which is influenced by cavity insulation and board joints. This study aims to optimize cavity insulation configuration to enhance fire performance. Two mid-scale, non-load-bearing fire experiments on CFS walls were conducted, employing double-layered GP boards and rock wool insulation, under ISO834 time-temperature fire conditions. Meanwhile, a finite element model of physical space fluid-heat coupling of furnace-CFS walls considering joints with time was developed to reveal joint mechanisms and configurations. The results showed that non-insulated stud CFS walls had slower HF temperature rise and similar insulation compared to insulated counterparts, delaying HF temperature reach to 537 °C by 14 min. The base-layer joints had the least adverse impact on the HF temperature rise than overlapped joints and face-layer joints. The HF temperatures for various joint configurations reached 537 °C at different times: 57 min for the face layer, 62 min for the base layer, and 49 min for overlapped joints. Considering the construction cost-effectiveness, it was found that adding steel strips (the same width as the flange) at the joint position could significantly decelerate the HF temperature rise. In 60 min, the HF temperature in the model with additional steel strips dropped by 94 °C lower than in the 10 mm overlapped joint model. Finally, based on finite element results, design equations were proposed for predicting HF temperature variation over time across joint types.