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In this paper, a shape optimization approach is presented for a shear panel damper made of low yield steel to improve the deformation ability. A minimization problem of maximum cumulative equivalent plastic strain, an index of the deformation ability of the shear panel damper is formulated subject to a constraint of total absorbing energy. The response surface methodology as well as the design of experiment technique is applied to the optimization process. In this study, finite element analysis with isotropic/kinematic hardening model is adopted to simulate the cyclic elasto-plastic behavior instead of experimental approach, and the numerical solutions are validated by comparing with previous experimental results. With the numerical analysis, the shape parameters effects are investigated and second order polynomials are fitted to obtain the regression equations for the maximum cumulative equivalent plastic strain and the total absorbing energy. The final optimal shape is determined by using the established regression equations. The shape optimization approach can substantially improve the deformation capacity of the shear panel damper.