In the paper a simplified nonlinear method has been applied to the analysis of base-isolated structures. In the first part, a three-linear idealization of the capacity curve is proposed. The initial stiffness is defined based on the first yielding point in the superstructure, whereas the secondary slope depends on the failure mechanism of the superstructure. A consequence is a much more pronounced secondary slope, which does not correspond to the presumptions used in the originally proposed N2 method. A parametric nonlinear dynamic study of single degree of freedom systems with different hardening slopes and damping has been performed for an ensemble of seven EC8 spectrum-compatible artificial accelerograms. It was concluded that, in the long-period range, the equal displacement rule could be assumed also for the proposed systems with non-zero post-yield stiffness. In the second part, the proposed idealization was used for the analysis of isolated RC frame buildings that were isolated with different (lead) rubber-bearing isolation systems. The stiffness of the isolators was selected for three different protection levels and for three different ground motion intensities, which have resulted in elastic as well as moderately and fully damaged superstructure performance levels. Three different lateral load distributions were investigated. It was observed that a triangular distribution, with an additional force at the base, works best in the majority of practical cases. It was concluded that the N2 method can, in general, provide a reasonably accurate prediction of the actual top displacement, as well as of the expected damage to the superstructure. Copyright © 2009 John Wiley & Sons, Ltd.