An efficient and systematic procedure is proposed for finding the optimal damper positioning to minimize the dynamic compliance of a 3-D shear building model. The dynamic compliance is expressed in terms of the transfer function amplitudes of the local interstorey drifts evaluated at the undamped fundamental natural frequency. The dynamic compliance is minimized subject to a constraint on the sum of the damping coefficients of added dampers. Optimality criteria are derived and the optimal damper positioning is determined via an original steepest direction search algorithm. This algorithm enables one to find an optimal damper positioning sequentially for gradually increasing damper capacity levels. A non-monotonic design path with respect to the total damper capacity level often appears in the application of this algorithm. A new augmented algorithm via parameter switching is devised to find this non-monotonic design path. Copyright © 1999 John Wiley & Sons, Ltd.