In this paper, practical nonlinear inelastic analysis method of 3-dimensional steel structures accounting for gradual yielding with fibers on a section is developed. Geometric nonlinearities of member(p-$delta$) and frame(p-$Delta$) are accounted for by using stability functions. Residual stresses are considered by assigning initial stresses to the fiber on the section. The elastic core in a section is investigated at every loading step to determine the axial and bending stiffness reduction. The strain reversal effect is captured by investigating the stress change of each fiber. The proposed analysis proves to be useful in applying for practical analysis and design of three-dimensional steel frames.