This paper presents a new, improved, post-earthquake damage assessment method that takes into account residual deformations attained by the damaged structure during the earthquake. Local and global residual deformations and visual damage indicators are considered to estimate the maximum deformations experienced by the structure. As a particular development, the method allows measured displacements and rotations to be considered jointly. Uncertainties associated with both the excitation and the damaged structure are explicitly accounted for. The resulting maximum displacement estimates allow a more accurate evaluation of the extent of structural damage when judging the usability/reparability of the investigated structure. A trial application of the method to a real structure tested on a shaking table is presented. The results confirm the capability of the method to estimate the maximum displacement and the residual stiffness of the damaged structure. Copyright (c) 2011 John Wiley & Sons, Ltd.