During the Northridge earthquake, extensive brittle failures on the weld zones of the beam bottom flanges in the rigidity connection of steel special moment frames (SMFs) were detected. One of the primary reasons is the high-tensile strain demand created at the beam bottom flange zones due to positive bending. The weak panel zone of the I-section column exhibits more shear deformation, which promotes and accelerates the brittle fracture of the beam bottom flange weld zones. A box-strengthened panel zone can minimize the shear deformation of the panel zone of the I-section column, which may also reduce the inter-story displacement of steel SMFs and enhance their seismic behavior. In order to investigate this fact, in this research we carried out a model test of a steel frame with a box-strengthened panel zone to examine SMFs’ seismic performance and inter-story displacement, as well as testing the contribution of panel zone shear deformation to inter-story drift. Numerical methods were then used to investigate the influence of the axial compression ratio and beam-to-column linear stiffness ratio on the effect of shear deformation on the box-strengthened panel zone. Design recommendations are given based on the research results.