Based on the interaction of single pile, cap and soil, the load transfer matrixes of single pile and soil were proposed to establish an equivalent shear displacement method of single capped pile in layered soil. With the compatibility of displacement at the interface between the pile and the soil, equilibrium equations of pile and soil could be derived. With the increase of the total load on the pile cap, the lateral friction at the interface of the pile and the soil becomes so large that the occurrence of the sliding takes place. While there is little sliding at the interface between the soil under cap and the soil outside of the cap because of the less lateral friction, which gives rives to less settlement of the soil outside of the cap. Eventually, the results of the finite element method, existing theoretical method and the model tests were compared with those from the analytical method and were found to be in good agreement. The increase of the ratio of length to diameter does not infinitely enlarge the overall stiffness of the single capped pile, because the pile cap would afford part of the loading all the time.