The cladding‐structure interaction of precast concrete frame systems under seismic action has not been properly addressed in the past, as shown by several failures occurred under recent earthquakes in Southern Europe, which point out the need of a revision of the current design practice and technology. Dissipative systems of connections are proposed to this purpose within a general framework for seismic design of precast structures with cladding panels. The proposed connection systems consist of friction‐based or plasticity‐based devices interposed in between adjacent cladding panels or between the panels and the resisting frame to control the level of transferred forces and limit the displacements of the structure. Monotonic and cyclic experimental tests are carried out on both single connection devices and structural sub‐assemblies of two panels. Furthermore, cyclic and pseudo‐dynamic tests on a full‐scale prototype of precast structure with cladding panels are performed. The influence on the structural response of silicone sealant is also investigated through experimental testing. The effectiveness of the tested dissipative connections of the cladding panels in enhancing the seismic performance of precast structures is demonstrated by means of nonlinear dynamic analyses considering the influence of the roof diaphragm action. Design guidelines are finally provided for both single connectors and panel structural assemblies based on equilibrium and capacity design criteria.