The performance of bonded concrete overlays relates mainly to the resistance against cracking and debonding. The associated failure mechanisms are largely a result of differential volume changes between substrate and overlay. The objective of this research was to develop analytical tools to facilitate the design of bonded overlays subjected to differential shrinkage. The experimental programme included the identification of fundamental strain characteristics and bond strength development of composite members in relation to different interface textures and overlay materials. Existing analytical models for the prediction of strains and stresses in bonded overlays were evaluated. Results from the experimental work indicated that existing models, which are based on simple beam theory, are deficient in modelling overlay strains in a realistic manner. The degree of overlay restraint was found to depend far less on relative sectional dimensions of substrate and overlay as commonly assumed. Based on fundamental aspects concerning strain characteristrics of bonded overlays identified through experimental tests and numerical simulations, an analytical prediction model was developed based on localised strain conditions at the interface.