Loss of zonal isolation in a wellbore can be caused by mechanical failure of the cement or by development of a microannulus. However, behavior of the sealant is driven by specific boundary conditions such as rock properties. Large-scale laboratory testing of the cement sheath in an annular geometry and a confined situation was performed to simulate various downhole stress conditions and evaluate the behavior of several sealants. Failure modes of the cement sheath were determined as a function of cement mechanical properties, loading parameters, and boundary conditions. Results were used to validate an analytical model that predicts cement-sheath failure.