Concrete cover separation (CCS) is frequently happened prior to the yielding of steel stirrups in FRP-strengthened RC beams. However, the debonding mechanism and criterion have not been fully understood. In this study, the typical crack types associated with CCS are comprehensively summarized and investigated in terms of profiles and kinematics of crack. The dowel action and dowelling cracks are proved to be the dominant factors causing CCS. Based on the cracking features, the simplified local debonding strength and average shear strength of fracture interface, which constitutes the contribution of concrete to shear capacity of strengthened RC beams, are analytically derived and verified against the available experiments and code provisions. Through regression analysis of 179 collected shear tests, a formulation based on the Critical Shear Crack Theory (CSCT) is presented to assess the deformability of strengthened RC beams governed by CCS. The commonly overlooked actual stress level in steel stirrups is considered as a function of the rotation capacity of beams and assessed based on the Modified Compression Field Theory (MCFT). Validation of this analytical approach, involving comparison against the empirical models and experimental results from 107 specimens, confirms its superior effectiveness and consistency in predicting CCS and shear strength.