The effects of differential motions on strength-reduction factors are described for structures subjected to propagating horizontal, vertical, and rocking near-source, fault-normal, and fault-parallel strong-motion displacements. It is shown that the common design rules for selection of the strength-reduction factors are not conservative for both fault-normal pulse and fault-parallel displacement. It is recommended that, for design of structures close to active faults, the strength-reduction factors for all components of strong motion be constant and equal to , where is ductility, for long periods, but only up to the collapse boundaries (where dynamic instability and gravity loads dominate). For periods shorter than about 2 s, these strength-reduction factors should be further reduced by 30 to 50 percent. Strength-reduction factors, earthquake differential motions, non-linear earthquake response, near-source earthquake motion, design of structures.