Based on Johansen yield theory (European yield model) and experimental observations, mechanical models and capacity equations for nail connectors used in wood-frame shear walls with cross-prefabricated ply-bamboo sheathing panels were studied. Embedment strength of ply-bamboo panel was obtained in accordance with a British Standards Institution (BSI) standard. Monotonic and cyclic tests of nails applied in timber-bamboo shear walls were performed to validate the capacity equations. The adopted capacity equation based on European yield model meets the test results well, in the average and with a reduced scatter. The theoretical and experimental results obtained from the research suggested a capacity model and equations to predict the bearing capacity of timber-bamboo nail connections, indicating that ply-bamboo panels can be used as sheathings for light-weight timber structures, as well as included in existing timber design code.