This paper focuses on a new type of exterior wall system for steel building frames. The wall system consists of precast reinforced concrete wall panels that are bolted to the beams of a steel building frame and are equipped with the inter-panel steel tee energy absorbers. The precast wall panels and the steel tees are expected to remain elastic and absorb hysteretic energy under the frame inter-story drifts caused by earthquakes, respectively. To demonstrate the perceived benefits of the exterior wall system and investigate the behavior of the steel tee energy absorbers, a group of five specimens with each consisting of a steel frame, a pair of precast wall panels and a set of six steel tee energy absorbers were designed, constructed and tested. The test parameters varied among the specimens were the geometries of the steel tee energy absorbers and the technology adopted to develop them. The steel frame and the precast wall panels were re-used in all specimens. Each specimen was tested through a two-phase loading program which imposed the inter-story drift demands with progressively increasing and constant peak amplitudes, respectively. All the specimens sustained the maximum inter-story drift angle of 0.05 rad or larger and exhibited a stable energy dissipation response. The tests demonstrated the damage free response of the precast exterior wall panels as well as the replaceability of the steel tee energy absorbers. Based on an idealized curvature distribution in the webs of the steel tee energy absorbers, the classic beam theory, and the virtual work theory, this research established a simplified model for computing the strengths of the steel tee energy absorbers as well as their contribution to the lateral strength of the frame. The model was found to be able to provide acceptable predictions for the tested specimens and it is recommended for future design.