AbstractPerformance‐based concepts are discussed in terms of their application for seismic assessment, rehabilitation and design of unreinforced masonry buildings. Deviations from traditional design approaches for masonry are discussed in terms of new performance‐based engineering procedures recently introduced through the FEMA 273 Guidelines for Seismic Rehabilitation. Difficulties in characterizing performance states for unreinforced masonry structural systems are discussed to present the challenge of implementing performance‐based approaches for masonry buildings. Four analytical methods are described for estimating seismic demand on individual wall or pier components, based on linear or nonlinear behaviour and static or dynamic response. Expressions to estimate lateral strength of unreinforced masonry wall and pier components are given. Acceptable performance limits for masonry walls and piers are presented for components behaving in rocking, bed joint sliding, toe compression or diagonal tension. Future directions for performance‐based engineering of unreinforced masonry buildings are discussed as well as research needed for further development of these concepts.