The pretensioning force in bolted joints enhances the lateral strength of the connections, and causes the embedment of metal washers into wood. Despite the significance of embedment behavior in the design of bolted joints, its mechanism has yet to be fully understood. In this study, the mechanism of the embedment of a metal washer into wood along the radial direction was examined through three-dimensional nonlinear finite-element analysis (FEA). The FEA results were validated by comparing them with experimental results for nine metal washers with different geometries. Moreover, the sensitivity of embedment stiffness and yield load to wooden material constants was also investigated. The numerical results showed good qualitative and quantitative agreement with the experimental results. In addition, the embedment stiffness and yield load were sensitive to the yield stress and Young’s modulus of wood in the radial and tangential directions. The determination of these mechanical properties of wood through material testing is important for reproducing the behavior of the embedment of a metal washer into wood and accurately estimating the yield load and initial stiffness using FEA. This will play a significant role in designing bolted joints.