The research presented herein involves a performance‐based design method for a tall hybrid coupled wall (HCW) system. For this study, HCW structures were designed with a performance‐based plastic design (PBPD) method. This approach directly accounts for inelastic structural behavior and considers design lateral force distribution at ultimate limit state. The design concept uses a pre‐selected target drift and yield mechanism as key performance limit states. The yield mechanism consists of shear yielding in the coupling beams and flexural yielding of reinforced concrete walls at the bases. HCW structures with varying heights and coupling ratios (CRs) were designed and subjected to a series of nonlinear dynamic analyses. The results indicated that the CR strongly influences the response of the structure. The structures could also be under‐designed when the inelastic distribution of lateral forces owing to higher modes was not properly considered. Finally, a design method to account for higher mode effects within the PBPD framework was presented. The method was validated using the results from nonlinear analyses. Copyright © 2016 John Wiley & Sons, Ltd.