Cold-formed steel (CFS) construction offers several benefits over traditional construction, including being lightweight, sustainable, recyclable, quick to build, insect and rot-resistant, and suitable for computer-aided design and manufacture. Despite extensive research on CFS elements, there are still gaps in our understanding of the behaviour of CFS structural systems, particularly their response to severe earthquake events. This experimental program aims to provide a better understanding on the seismic behaviour of strap-braced stud-walls as a lateral force resisting system for residential medium-rise buildings. An innovative test rig is developed that is capable of applying a constant vertical load during lateral cyclic testing, replicating the loading conditions expected during an earthquake event in such cases. For the first time, seven full-scale tests are conducted on CFS walls under vertical and horizontal loading using standard sections in New Zealand. The vertical capacity, lateral stiffness, ultimate strength, ductility, and failure mechanisms of the specimens are investigated. Subsequently, a modified detailing is suggested, which allows CFS walls to exhibit considerably better seismic behaviour compared to the systems with conventional detailing. It is shown that by adopting the modified detailing, CFS walls exhibit an ideal elastic-plastic curve with negligible degradation in successive cycles and a high ductility factor exceeding 5. The results of this study should prove useful for more efficient design of CFS strap-braced stud walls for mid-rise buildings.