Corrosion of reinforcing bars is a common deficiency for existing RC buildings, which may have significant adverse effects on seismic performance of those buildings. The main effects of corrosion of reinforcing bars are strength loss as a result of reduction of the effective cross-sectional area of the bars, reduced bond strength between concrete and bars as a result of the increased volume of the bars because of rust products, and reduced elongation capacity of the bars as a result of the concentration of plastic deformations at sections of corrosion pits. The last item (concentration of plastic deformations of reinforcing bars only at the most heavily corroded sections rather than occurring all through the potential plastic hinge length) has a very remarkable adverse effect on the displacement capacity of existing buildings. It is known that the displacement capacity is as important as strength, particularly for the buildings that are designed to exhibit ductile behavior during earthquakes. In this study, this adverse effect is demonstrated quantitatively through nonlinear pushover and nonlinear time-history analyses of a hypothetical RC frame building. To obtain more general conclusions, different corrosion intensities and distributions of reinforcing bars and different earthquake records are considered in the analyses. Furthermore, the results of an experimental study on the seismic performance of RC columns with corroded reinforcing bars, which constituted the reason for the analytical studies, are presented.