Residual stresses in timber members—which arising from growth stresses, drying-induced gradients and manufacturing processes—can significantly affect stiffness, serviceability and long-term performance. In orthotropic wood, these effects are strongly anisotropic and three-dimensional, so that accurate prediction of mechanical indicators requires solid Finite Element (FE) models capable of incorporating initial stress in a mechanically consistent manner. This work proposes a three-dimensional Small-on-Large (SoL) [1] FE formulation applied to orthotropic timber. Starting from the SoL framework with orthotropic elasticity, the incremental constitutive tensor including initial-stress effects is derived in index notation. The resulting incremental tangent naturally splits into material and geometric contributions driven by the residual stress field. A key feature of the formulation is that the incremental Cauchy stress is kept symmetric, while the displacement gradient and the SoL elasticity tensor lose minor and major symmetries; consequently, the usual symmetric strain–displacement matrices of linear elasticity must be replaced by a more general, non-symmetric kinematic operator acting on the full displacement gradient. The SoL-based constitutive law is implemented in standardsolid FE within the research code FEAP. The same formulation may be used in static, dynamic or eigenvalue analyses on a prestressed configuration. The proposed approach is applied to orthotropic timber members under representative residual-stress scenarios, and its predictions are compared with conventional linear-elastic models and with experimental measurements on timber specimens.