A consistent third-order shell theory with applications to composite circular cylinders is presented and its finite element formulation is developed. The formulation has seven displacement functions and requires C° continuity in the displacement field. The exact computation of stress resultants is carried out through numerical integration of material stiffness coefficients of the laminate. A displacement finite element model is developed using Lagrange elements with higher-order interpolation polynomials. These elements preclude any effect of shear and membranes locking. Comparisons of the present results with those found in the literature for typical benchmark problems involving isotropic and composite cylindrical shells are found to be excellent and show the validity of the developed shell theory and its implementation into a finite element code. Copyright © 2005 by the American Institute of Aeronautics and Astronautics, Inc. All rights reserved.