Previous earthquake experiences have shown that conventional yielding dampers designed for an earthquake intensity cannot perform adequately at higher intensity levels. This paper addresses this issue by proposing a two-level yielding configuration for knee-braced steel frames having an innovative deformation-controlled ring damper (CRD). The proposed configuration includes a knee element damper (KED) and a CRD with a deformation-control device. In weak or moderate earthquakes, the CRD serves as the primary energy absorber. In contrast, in higher-intensity earthquakes, the deformation of the CRD is controlled and the KED acts as a secondary fuse for energy dissipation. In this study, four traditional ring dampers with different geometric properties and two CRD were experimentally tested and their numerical models in Abaqus were successfully verified. The results demonstrated stable and asymmetric hysteretic curves with satisfactory ductility and energy absorption of the ring dampers. Additionally, the CRD revealed a proper control of deformation. Subsequently, a previously tested knee-braced frame specimen with the common ring damper was numerically modeled. After verifying the validity of the model, the behavior of a typical knee-braced frame equipped with a deformation-controlled multi-ring damper (CRD-KBF) was investigated and compared with a common KBF and ring-braced frame (RBF). The obtained results confirmed the expected two-level yielding behavior of the proposed configuration. The numerical analyses demonstrated higher ductility and energy dissipation capacity of the CRD-KBF compared to the other frames.