To fulfill a displacement-based design or response prediction for nonlinear structures, the concept of equivalent linearization is usually applied, and the key issue is to derive the equivalent parameters considering the characteristics of hysteretic model, ductility level, and input ground motions. Pinching hysteretic structures subjected to dynamic loading exhibit hysteresis with degraded stiffness and strength and thus reduced energy dissipation. In case of excitation of near-fault earthquake ground motions, the energy dissipation is further limited due to the short duration of vibration. In order to improve the energy dissipation capability, viscous-type dampers have been advantageously incorporated into these types of structures. Against the viscously damped pinching hysteretic structure under the excitation of near-fault ground motions, this study aims to develop a seismic response estimation method using an equivalent linearization technique. The energy dissipation of various hysteretic cycles, including stationary hysteretic cycle, amplitude expansion cycle, and amplitude reduction cycle, is investigated, and empirical formulas for the equivalent damping ratio is proposed. A damping modification factor that accounts for the near-fault effect is introduced and expanded to ensure its applicability to structures with damping ratios less than 5%. An approach for estimating the maximum displacement of a viscously damped pinching hysteretic structure, in which the pinching hysteretic effect of a structure and the near-fault effect of ground motions are considered, is developed. A time history analysis of an extensive range of structural parameters is performed. The results confirm that the proposed approach can be applied to estimate the maximum displacement of a viscously damped pinching hysteretic structure that is subjected to near-fault ground motions.