Abstract The strength of composite wall panel depends on plain concrete strength, degree of confinement and the composite action of steel and concrete acting together. This paper presents details of an experimental study on the effect of confinement on axial capacity and behaviour of steel-foamed concrete composite panels. Five small scale load tests are carried out on wall panels with different configuration of studs and sheet edge boundary conditions. Light weight foamed concrete (LFC) is used as infill material and the interaction between sheeting and concrete is achieved by using through–through studs. The loading is primarily distributed over the concrete surface, so as to avoid early/brittle local buckling of sheet under direct compressive loading of wall panel. Failure modes such as vertical separation and diagonal shear failure of concrete are observed and the axial resistance of wall is found to increase with the degree of confinement provided by studs and sheet edge conditions. Also the controlled lateral deformations of confined concrete by steel sheeting due to interconnecting studs exhibited ductile deformations after the post peak behaviour. Based on the failure modes obtained from the tests, a new method is proposed to determine the axial resistance of composite walls.