Cable bolts comprise a group of steel wires twisted into strands in spiral spatial configurations. This structural characteristic results in a non-uniform stress distribution among the individual wires under shear loading, which makes them fail sequentially rather than simultaneously. However, the stress evolution and failure mechanism of individual wires within a cable bolt remain insufficiently understood. This paper combines experimental and numerical methods to investigate the fracture mechanism of cable bolts. Strain gauges were employed to accurately monitor the stress evolution and fracture sequence of cable wires during shear testing. A numerical model of the bolted rock joint was developed to analyze the stress state of cable wires and the stress differences among wires. The results show that the spiral structure of the cable bolt and the complex load transfer behavior among wires induce differentiated load sharing among the wires, with stretched and side wires experiencing much higher axial and shear stresses than the others. These highly stressed wires yield and fracture first, after which the load is rapidly redistributed to the remaining wires, triggering a progressive fracture. The key factor determining the cable fracture is the stress state of individual wires. Based on the stress state of individual wires before the first fracture, a tensile-shear failure criterion was developed by incorporating the single wire load bearing capacity into the Tresca yield criterion. The proposed criterion captures the premature failure caused by non-uniform stress and provides a more conservative design basis for anchorage systems.