In light wood-frame buildings, the gravitational and lateral force-resisting systems are composed of floor diaphragms and shear walls. During an earthquake, these walls are subjected to the simultaneous action of in-plane vertical force, shear force, and in-plane bending moment. In a mid-rise building, these internal forces can reach large magnitudes, especially on the lower stories, and could have an important influence on the lateral behavior of the walls. The historical use of light wood-frame construction has been in low-rise buildings. Consequently, few investigations have analyzed the effects of high gravitational forces or in-plane bending moment on the lateral behavior of wood shear walls designed for multi-story buildings. This paper presents an investigation of the cyclic lateral behavior of light wood-frame shear walls, designed for mid-rise buildings, subjected to large axial compressive load and in-plane bending moment. Eight wall specimens were experimentally tested with a cyclic lateral displacement protocol, a constant compressive load, and a cyclic in-plane bending moment. The effects of axial compressive load and in-plane bending moment were analyzed. Also, the wall length and the spacing of sheathing nails were varied to study the effects of these variables on the response. A numerical study was performed to show how these effects could influence the response of mid-rise timber buildings. An improvement in the lateral performance of the walls was observed compared to walls tested without compressive force nor bending moment, showing an increase in stiffness, load-carrying capacity, and dissipated energy.