The seismic behavior factor, R, is a critical parameter in contemporary seismic design. In the 2005 edition of the National Building Code of Canada, the R factor consists of ductility related force modification factor, Rd, and overstrength-related force modification factor, Ro. The choice of these factors for design depends on the structural system type. In this investigation, typical braced frames of Modular Steel Buildings (MSBs) are designed and modeled. Nonlinear static pushover analyses are conducted to study the inelastic behavior of these frames. Structural overstrength resulting from redistribution of internal forces in the inelastic range, design assumptions, and strain hardening behavior of steel and displacement ductility are evaluated and their relationships with some key response parameters are assessed. The results show that the reserve strength of MSB-braced systems is greater than that prescribed by the Canadian code for regular braced systems. It also appears that R depends on building height, contrary to what has been prescribed in many seismic design codes. It is concluded that some unique detailing requirements of MSBs need to be considered during design to eliminate undesirable seismic response.