The size effect caused by post-peak softening in the relation of interface shear stress and slip displacement between a fiber or reinforcing bar and the surrounding matrix, is analyzed. The problem is simplified as one-dimensional. It is shown that the post-peak softening leads to localization of slip. The larger the bar or fiber size, the stronger the localization. The size effect in geometrically similar pullout tests of different sizes is found to represent a transition from the case of no size effect for small sizes to the case of a size effect of the same type as in linear elastic fracture mechanics, in which the difference of the pullout stress in the fiber and the residual pullout stress corresponding to the residual interface shear stress is proportional to the inverse square root of bar or fiber size. An analytical expression for the transitional size effect is obtained and is found to approximately agree with the generalized form of the size effect law proposed earlier by Bažant. Measurements of the size effect can be used for identifying the interface properties.