Post-earthquake financial loss of structures induced by residual inter-story deformation (RID) has been recently noticed and various strategies have been proposed. A newly-emerged energy-dissipation material, namely, iron-based shape-memory-alloy (Fe-SMA), has gain favor in civil engineering community due to its extraordinary low-cycle fatigue resistance property. Besides, Fe-SMA is believed to help improve structure’s post-earthquake residual inter-story deformation control capacity due to its moderate strain hardening behavior and pseudo-elasticity. This study explores the performance of emerging steel frame systems equipped with energy-dissipation devices fabricated with Fe-SMA. In particular, a brace with built-in Fe-SMA-based U-shaped strips (USSs) is employed serving as the energy-dissipation devices in the proposed system. In this paper, the basic mechanical properties of Fe-SMA are discussed firstly, followed by a description of the working principle of the USSs. The hysteresis behavior of two types of USSs, fabricated with Fe-SMA and conventional mild steel (Q235), were investigated experimentally. Based on the test results, numerical models for the prototype braces equipped with USSs are established using ABAQUS and OpenSEES, and the necessary key material parameters are calibrated. Subsequently, system-level analysis is performed on 5-story prototype steel buildings. Specially, two types of steel frames, i.e., frames with high-strength-steel columns and frames with conventional structural steel-based columns, are established. Concurrently, braces with Fe-SMA-based USSs as well as mild steel-based USSs are considered. The results demonstrated that the Fe-SMA-based energy-dissipation devices along with the steel frames with high-strength-steel columns can provide the most satisfied RID control effectiveness compared with the other yielding structural systems investigated in this paper.