A new procedure for probabilistic seismic risk assessment of nuclear power plants (NPPs) is proposed. This procedure modifies the current procedures using tools developed recently for performance-based earthquake engineering of buildings. The proposed procedure uses (a) response-based fragility curves to represent the capacity of structural and nonstructural components of NPPs, (b) nonlinear response-history analysis to characterize the demands on those components, and (c) Monte Carlo simulations to determine the damage state of the components. The use of response-rather than ground-motion-based fragility curves enables the curves to be independent of seismic hazard and closely related to component capacity. The use of Monte Carlo procedure enables the correlation in the responses of components to be directly included in the risk assessment. An example of the methodology is presented in a companion paper to demonstrate its use and provide the technical basis for aspects of the methodology. ?? 2011 Published by Elsevier B.V.