The demand for highly structurally efficient stainless steel is limited to a certain extent by its high initial cost. Therefore, the utilisation of material to the optimum possible level is important. In achieving this, further consideration should be given to enhance the design rules where beneficial effects such as pronounced strain hardening in stainless steel should be taken into account in the design process. In addition to that, a thorough understanding of the structural behaviour of stainless steel sections is also required. However, the shear behaviour and capacity of cold-formed stainless steel lipped channel beams (LCBs) have not been thoroughly investigated previously. Therefore, experimental and detailed finite element (FE) modelling were undertaken to investigate the shear behaviour and strength of stainless steel LCBs. A comprehensive parametric study was also conducted by developing 100 FE models. From the results, the available post-buckling strength in slender stainless steel LCBs was highlighted. Furthermore, the beneficial strength increment due to the strain hardening effect of stainless steel, particularly for compact LCBs in shear, was investigated. Comparisons indicated that current EN1993-1-4 and direct strength method (DSM) shear design rules are too conservative in particularly for compact sections. Thus, existing shear design rules were modified to enhance the overall prediction accuracy for stainless steel LCBs while attention was given to capture the available inelastic reserve capacity.