Passive energy dissipating devices have been widely used for seismic hazard mitigation. Design of steel structures with passive energy devices usually employs methods that need to be experimentally evaluated for the development of performance-based design procedures. In this paper a simplified design procedure is applied to design a two-story, four-bay steel Moment Resisting Frame (MRF) with Magneto-Rheological (MR) dampers in a passive mode. The performance of the resulting MRF is experimentally evaluated through real-time hybrid simulation and compared with a conventionally designed Special Moment Resisting Frame (SMRF). The MRF with MR dampers is demonstrated to achieve higher performance than the conventional SMRF under a selected ground motion. The simplified design procedure is shown to effectively help design steel structures with MR dampers. Real-time hybrid simulation with the unconditionally stable explicit CR algorithm and the adaptive compensation method is shown to have great potential as a means to develop and experimentally validate performance-based design methodologies for steel structures with energy dissipative devices.