The cold-formed steel (CFS) wall frames need to be stiff-strong to inhibit the instability failures. The current design specifications do not have a robust design method for sheathed CFS wall panels. A safe wall frame design is possible by providing adequate bracing to resist the instability failures, which the sheathing boards can do. A new design method based on the demand and supply approach called “Direct Stiffness-Strength Method” (DSSM) is developed to fulfill sheathing-bracing design needs. Nevertheless, it is necessary to validate the suitability of the DSSM for the design of CFS wall frames with various sheathing materials. In this study, a total of 58 CFS sheathed panels were tested under out-of-plane loading with varying design parameters such as global (λe), local (λl), and distortional slenderness (λd), two sheathing board types (Gypsum and Plywood), sheathing board thicknesses (tb), and sheathing fastener connection spacing (df). The full-scale test results indicate that the resistance of the sheathing fastener connection is sensitive to the thickness of the fibrous sheathing board plywood. The full-scale test results were compared with the design strength of CFS wall panels using DSSM. The sheathed CFS wall panel design indicates that the current DSSM method is unconservative for gypsum sheathing (both 12.5 mm 15 mm thicknesses) and overly safe for 12 mm thick plywood sheathing. This can be attributed to the omission of sheathing thickness in the DSSM approach to determine the stiffness and strength of the sheathing fastener connection. Further, the reasons for the inaccurate prediction of the current DSSM method are discussed in detail. A set of new resistance factor values are proposed for the accurate design prediction of sheathed CFS wall panels. Finally, the paper presents and discusses the application of the proposed design approach and provides evidence for the benefits of DSSM. © 2022 Elsevier Ltd