This paper intends to provide quantitative seismic response characteristics of steel moment resisting frames (MRFs) with inelastic beam-to-column panel zone joints. Two modeling approaches are proposed for this purpose along with a methodology to consider the fracture potential at the bottom beam flange in steel MRFs due to panel zone kinking. Both approaches, which are validated with available experiments, preserve the behavioral insights of inelastic panel zones. Nonlinear static and dynamic analyses are then conducted to quantify the seismic demands of 32 prototype steel MRFs while their panel zones exhibit various levels of inelastic deformations. Engineering demand parameter hazard curves are developed to interpret the results for a risk-targeted seismic performance. The results demonstrate that steel MRFs with panel zone shear distortions of 10 to 15 times the shear distortion at yield, gamma y${\gamma _y}$, have a mean annual frequency of collapse ranging from 1.5x10-4$1.5 \times {10<^>{ - 4}}$ to 2.5x10-4$2.5 \times {10<^>{ - 4}}$, which is up to two times lower than corresponding results with code-compliant steel MRFs (i.e., gamma <= 4 gamma y).$\gamma \le 4{\gamma _y}).$ It is shown that steel MRFs with inelastic deformations of 10 gamma y${\gamma _y}$ in their panel zones, (a) enjoy up to 50% reduction in residual story drift ratios at a design basis earthquake; (b) their beam-to-column connections do not experience fractures due to panel zone kinking; and (c) local buckling in steel beams is very limited even at low probability of occurrence earthquakes. The above hold true when the current detailing and fabrication practice is employed. The findings have implications on seismic design and the post-seismic repairability of steel MRFs.