We have developed a beam-to-column connection which has small projection exterior diaphragms using thicker steel plates than the conventional ones. This study aims to propose a rational design procedure for a steel moment-resisting frame (MRF) with exterior diaphragms. The design procedure focuses on the reduction rate of story stiffness of MRF with exterior diaphragms to that with rigid connections. The recommended optimum value of the reduction rate of story stiffness is proposed by static incremental analysis and time history response analysis.