The seismic resilience of prefabricated steel structures significantly depends on the design and construction of beam-column joints. To address the challenges related to the installation of prefabricated wall panels and overall system assembly, this study introduces a novel stepped beam-column joint. The effectiveness of different connection configurations on the seismic behavior of the joints was investigated. A series of cyclic tests were conducted on four joint specimens with different configurations, and their failure mechanisms, hysteretic curves, skeleton curves, stiffness degradation, load-bearing capacity, and energy dissipation capacity, were revealed. The experimental results showed that the stepped joint configuration offers favourable seismic performance, with notable asymmetry observed in the response patterns under positive and negative loading directions. Reducing the height of the stepped segment or the thickness of the end plate adversely affected the seismic performance, leading to early bolt failure. Consequently, a detailed finite element model of the stepped joint was developed and the model demonstrated satisfactory agreement with the experimental results. Furthermore, a parametric analysis focusing on variations in stepped segment's height was conducted, providing insights into optimization of the load-bearing capacity of the stepped joint. The difference in the performance between the stepped joints and traditional flush end plate joints is also highlighted.