This paper presents a practical multi-level performance-based optimisation method of nonlinear viscous dampers (NVDs) for seismic retrofit of existing substandard steel frames. A Maxwell model is adopted to simulate the behaviour of the combined damper-supporting brace system, with a fractional power-law force–velocity relationship for the NVDs, while a distributed-plasticity fibre-based section approach is used to model the beam-column members thus incorporating the nonlinearity of the parent steel frame in the design process. The optimum height-wise distribution of the damping coefficients of NVDs satisfying given performance requirements is identified via a uniform damage distribution (UDD) design philosophy. The efficiency of the proposed multi-level performance-based design optimisation is illustrated through nonlinear time-history analysis of 3-, 7- and 12-storey steel frames under both artificial and natural spectrum-compatible earthquakes. Sensitivity analysis is performed to investigate the effects of initial height-wise damping distribution, convergence factor and uncertainty in design ground-motion prediction on the optimisation strategy. The efficiency of the final optimum design solution is also investigated by using drift-based, velocity-based, and energy-based UDD approaches to identify the most efficient performance index parameter for optimisation purposes. It is found that regardless of the selected performance parameter, the optimum damping distribution identified by the proposed methodology leads to frames exhibiting lower maximum inter-storey drift, local damage (maximum plastic rotation) and global damage index compared to an equal-cost uniform damping distribution. However, using drift-based UDD approach generally results in a better seismic performance. It is shown that the proposed UDD optimisation method can be efficiently used to satisfy multiple performance objectives at different intensity levels of the earthquake excitation, in line with performance-based design recommendations of current seismic codes. The proposed method is easy to implement for practical design purposes and represents a simple yet efficient tool for optimum seismic retrofit of steel frames with NVDs.