The object of this paper is to make clear the ultimate shear resistance mechanism and strength of vertical connections between precast concrete wall panels into which the dowel action and the compressive stress acting on the interface are taken into account. The mathematical model for the ultimate shear resistance of vertical connection is derived from limit analysis by using both Johansen's yield-line theory and modified Mohr-Coulomb's fracture criteria. The proposed formulas for the ultimate shear strength of vertical connection are found to be in good agreement with both test results of prototype specimens and these other specimens.