This paper presents a reliable numerical procedure for nonlinear time-history analysis of space steel frames subjected to dynamic loads. Geometric nonlinearities of member (P-$delta$) and frame (P-$Delta$) are taken into account by the use of stability functions in framed stiffness matrix formulation. The gradual yielding along the member length and over the cross section is included by using a tangent modulus concept and a softening plastic hinge model based on the New-Orbison yield surface. A computer program utilizing the average acceleration method for the integration scheme is developed to numerically solve the equation of motion of framed structure formulated in an incremental form. The results of several numerical examples are compared with those derived from using beam element model of ABAQUS program to illustrate the accuracy and the computational efficiency of the proposed procedure.