A steel frame building with an X-bracing system, infill panels in both directions and “Khorjini” connections damaged in the Bam earthquake was studied using nonlinear dynamic analysis. To model the nonlinear force–deformation characteristics of columns, infill panels and braces, the specifications given in FEMA-356 were used, whereas for the Khorjini connections experimental results demonstrated these specifications. The comparison criterion for damage was life safety performance. The results show good correspondence of the building’s overall behavior in a story drift event. The extent of damage to columns and infill panels is in excellent correlation with the real damaged structure. It was also shown that most of the energy was absorbed by the infill panels, and for this complex system the infill panels played a crucial role in preventing the structure from collapse.