This paper presents a method of elastic-plastic analysis for planar steel frames that provides the accuracy of distributed plasticity methods with the computational efficiency that is greater than that of distributed plasticity methods but less than that of plastic-hinge based methods. This method accounts for the effect of spread of plasticity accurately without discretization through the cross-section of a beam-column element, which is achieved by the following procedures. First, nonlinear equations describing the relationships between generalized stresses and strains of the cross-section are derived analytically. Next, nonlinear force-deformation relationships for the beam-column element are obtained through lengthwise integration of the generalized strains. Elastic-plastic flexibility coefficients are then calculated by differentiating the above element force-deformation relationships. Finally, an elastic-plastic stiffness matrix is obtained by making use of the flexibility-stiffness transformation. Adding the conventional geometric stiffness matrix to the elastic-plastic stiffness matrix results in the tangent stiffness matrix, which can readily be used to evaluate the load carrying capacity of steel frames following standard nonlinear analysis procedures. The accuracy of the proposed method is verified by several examples that are sensitive to the effect of spread of plasticity.