Performance based design requires precise simulation of the hysteretic behavior of structural components, which depends on various structural parameters that affect the deformation and energy dissipation characteristics. Panel zone, as a component of a steel moment resisting frame (MRF), has shear yielding as its main source of energy dissipation. If properly designed, the panel zone can contribute to more than 50% of the total energy dissipation. Current design guidelines recommend the balanced design of the panel zone, while weak and strong panel zones are discouraged. The effect of the panel zone surrounding elements (column-flange thickness (CFT), and beam-web slenderness ratio (BSR)) on the panel zone shear strength has not been thoroughly investigated. Where, different studies have shown that the AISC design equation for calculating the nominal panel zone shear strength overestimates the connection shear strength, especially with thick column flanges. A parametric study (more than 1300 subassemblies) is adopted, using finite element method, to investigate the effect of CFT and BSR on the panel zone strength. The finite element models used in this study are validated using a physical experiment and the validation shows a good fit with the test results in terms of stiffness, maximum strength, total energy dissipation, and the contribution of each subassembly component (panel zone, beam, and column) to the total story drift and the total energy dissipation. The study demonstrates the considerable effect of the panel zone surrounding elements on the calculation of the panel zone shear strength.