The nodular diaphragm wall (NDW) is a novel foundation that can provide significant uplift load resistance compared to a typical diaphragm wall foundation. With the advantages of low noise, cost‐effectiveness, high work efficiency, and construction abilities close to existing buildings, NDW has excellent engineering application prospects in urbanization construction. However, the scarce knowledge on the uplift resistance, failure mode, and calculation method of the NDW has hindered its application in practice. In this paper, indoor model tests based on particle image velocimetry (PIV) technology are carried out to investigate the uplift behavior of three NDW models with different amounts and locations of nodular parts. The load transfer mechanisms of the three NDW models are discussed in detail, and special attention is given to the failure mode analysis. In addition, a theoretical analysis is implemented based on the load transfer approach. The transfer function and associated critical parameters are discussed in detail. Accordingly, an iterative procedure is proposed to interpret the load transfer information of an uplift NDW in multilayered soils under different loading levels. The findings derived in this paper are helpful to the uplift deformation, capacity calculation, and design of NDW in practical engineering.