In this paper, a conceptual design, fabrication, and testing of advanced polymer matrix composite (PMC) infill system are addressed for seismic retrofitting of steel frames. Such a system is designed to have a multi-panel PMC infill system with passive energy mechanism. The basic configuration of this system is composed of two separate components—namely, an inner PMC sandwich panel and outer damping panels. The inner PMC sandwich infill consists of two fiber-reinforced polymer (FRP) laminates with Divincell® H core, and outer damping panels are made of FRP laminate plates and passive energy constrained damping layers—combining polymer honeycomb and 3M viscoelastic solid materials—at the interface between the laminates. The interactions of these two components produce considerable stiffness and enhanced damping properties in the structure following different drift level. Conceptually, the FRP outer damping panels are designed to produce the damping through the cyclic shear straining of the combined interface damping layers. Moreover, as the lateral drift increases, the inner PMC sandwich infill is designed to provide considerable lateral stiffness to resist severe earthquake excitation and avoid excessive relative floor displacements that cause both structural and non-structural damage. As part of this research, analytical and experimental studies were performed to investigate the effectiveness of the proposed multi-infill panel concept. The prefabricated multi-panel PMC infill holds a great promise for enhanced damping performance, simplification of the construction process, and the reduction of time and cost when used for seismic retrofitting applications.