While the size effect on ultimate shear strength of plain concrete (PC) slender beams has been extensively researched in the past decades, limited tests have been carried out to study the extent and mechanism of size effect in steel fiber-reinforced concrete (SFRC) beams. ACI 318-19 restricts the use of steel fibers as the minimum shear reinforcement to beams with a height of up to 24 in. (610 mm). In this study, in addition to analyzing available testing data, an experimental study was carried out on a series of SFRC beams with a range of heights including 12, 18, 24, 36, and 48 in. (305, 457, 610, 915, and 1220 mm). A digital image correlation (DIC) technology with a full-field deformation measuring capability was used to identify the underlying factors that cause size effect on the ultimate shear strength of SFRC slender beams. The results are distinctive because they dispute the conventional hypothesis by correlating the size effect of the ultimate shear strength on SFRC beams to the effects of the compression zone and dowel resistance, rather than by simply lowering the aggregate interlock or fiber bridging capacity in larger SFRC beams due to a wider critical crack. Consequently, a less robust dowel zone such as one lacking well-distributed steel fibers or an inadequate fiber dosage can result in early failure of dowel resistance and subsequent shear failure, which intensifies the size effect.