Finite element method (FEM) is an effective quantitative method to solve complex engineering problems. The basic idea of FEM for a complex problem is to be able to fmd a solution by reducing the problem made simple. If mathematical tools are inadequate to obtain precise result, even approximate result, FEM is the only method that can be used for structural analyses. In FEM, the domain is divided into a large number of simple, small and interconnected sub-regions called fmite elements. FEM has been used commonly for linear and nonlinear analyses of different types of structures to give us accurate results of plane stress and plane strain problems in civil engineering area. In this paper, FEM is used to investigate stress analysis of a shear wall which is subjected to concentrated loads and fundamental principles of stress analysis of the shear wall are presented by using matrix displacement method in this paper. This study is consisting of two parts. In the first part, the shear wall is discretized with constant strain triangular fmite elements and stiffness matrix and load vector which is attained from external effects are calculated for each of fmite elements using matrix displacement method. As to second part of the study, fmite element analysis of the shear wall is made by ANSYS software program. Results obtained in the second part are presented with tables and graphics, also results of each part is compared with each other, so the performance of the matrix displacement method is demonstrated. The solutions obtained by using the proposed method show excellent agreements with the results of ANSYS. The results show that this method is effective and preferable for the stress analysis of shell structures. Further studies should be carried out to be able to prove the efficiency of the matrix displacement method on the solution of plane stress problems using different types of structures.