Only one accelerometer is used in this paper for estimating the maximum inter-story drifts and time histories of the relative displacements of all stories of multi-degree-of-freedom (MDOF) shear structures under seismic excitation. The calculation based on the data of one sensor using a conventional method is unstable, and when modal coordinates are used, higher modes should be included, which is different from the estimation based on the responses recorded by many accelerometers. However, the parameters of the higher modes of structures are difficult to obtain from structures under small excitations. To overcome this difficulty, the recorded absolute acceleration is converted into the absolute displacement, and a state-space equation is formulated. Numerical simulations of a nine-story structure were conducted to check the applicability, robustness against environmental noise, and optimal installation location of the accelerometer of the proposed approach. In addition, the effects of the higher modes were analyzed in terms of the number of accelerometers and type of response. Finally, the proposed approach was validated in a simple experiment. The results indicate that it can accurately estimate the time histories of the relative displacements and maximum inter-story drifts of all floors when one accelerometer is used and just the first two modal parameters are incorporated in the model. Furthermore, the approach is robust against environmental noise.