The main objective of this study is to develop an discrete optimization algorithm of plane steel frames with rigid using second-order-elastic-plastic hinge analysis which is considering panel zone. Conventional analyses of steel frame are usually tarried out without considering the effect of panel zone deformation on frame behavior The validity of this model is established by comparison without panel zone on joint models is analyzed numerically to demonstrate the importance of using realistic models in steel frame analysis. The objective function is taken as Weight of steel frames and the constraints we formulated based on AISC-LRFD(1994). The validity of the developed algorithm we demonstrate by comparing the result with those of SAP2000. The result of the study indicates that the optimal design algorithm considering of panel zone behavior more economic design than simple steel frame design methods.