Interlaminar stresses near the free edges of composite laminates have been analyzed considering wall effects. Interface modeling of bonding layer was introduced to explain the wall effect. Using Lekhnitskii stress functions and the principle of complementary virtual work, the interlaminar stresses were obtained, which satisfied the traction free boundary conditions not only at the free edges, but also at the top and bottom surfaces of laminates. The interface modeling provides not singular stresses but concentrated finite interlaminar stresses. The significant amount of reductions of stresses at the free edge are observed compared to the results without interface modeling. The real stress state can be predicted accurately and the results demonstrate the usefulness of the proposed interface modeling for the strength design of composite laminates.