This paper focuses on the creation and numerical application of physically nonlinear plane steel frames analysis problems. The frames are analysed using finite elements with axial and bending deformations taken into account. Two nonlinear physical models are used and compared – linear hardening and ideal elastic-plastic. In the first model, distributions of plastic deformations along the elements and across the sections are taken into account. The proposed method allows for an exact determination of the stress-strain state of a rectangular section subjected to an arbitrary combination of bending moment and axial force. Development of plastic deformations in time and distribution along the length of elements are determined by dividing the structure (and loading) into the parts (increments) and determining the reduced modulus of elasticity for every part. The plastic hinge concept is used for the analysis based on the ideal elastic-plastic model. The created calculation algorithms have been fully implemented in a computer program. The numerical results of the two problems are presented in detail. Besides the stress-strain analysis, the described examples demonstrate how the accuracy of the results depends on the number of finite elements, on the number of load increments and on the physical material model. COMSOL finite element analysis software was used to compare the presented 1D FEM methodology to the 3D FEM mesh model analysis.