This study introduces the Slit Hybrid Frictional-Yield Damper (SHFYD), an innovative energy-dissipating device designed to reduce seismic forces during earthquakes. Combining frictional and yielding mechanisms, the SHFYD provides a two-phase response: frictional behavior for minor seismic events and yielding behavior for severe earthquake. Using finite element (FE) modeling in ABAQUS, a parametric analysis was conducted to evaluate its hysteretic behavior, failure modes, and the effects of key geometric and frictional parameters, including rib thickness (t), strip width (b), number of strips (n), strip height (h), bolt clamping force (Fp), radius (R), and slot width (S). Energy dissipation primarily occurs through the controlled plastic deformation in the steel strips, aligning with the capacity design principles. Increasing Fp enhances the damping ratio by up to 51%, but it remains below the strip's yield strength to maintain the two-stage mechanism. Thicker plates (8–20 mm) increase energy dissipation during the yielding phase by 113.96%, wider strips (7.5–22.5 mm) would yield the greater absorption by 344%, increasing the number of strips (1−6) results in a 375% rise in cumulative energy dissipation, and shorter strip heights (65–95 mm) improve energy dissipation by 67%. A numerical framework using nonlinear time-history analyses was developed in OpenSees to assess a 20-story high-rise building equipped with the hybrid system. The performance of the SHFYD was compared with the bare frame (BF) and a conventional damper (CSFYD) under suites of ground motions at Design Basis Earthquake (DBE) and Maximum Considered Earthquake (MCE) levels. Results show that the SHFYD outperforms both reference systems, reducing inter-story drifts and residual deformations. At the DBE level, the maximum mean IDR decreased from 2.68% (BF) to 1.20% (SHFYD), and at the MCE level from 5.44% to 1.70%, satisfying performance targets. A two-phase analytical framework was developed to predict the friction-to-yielding transition, confirming the damper’s hysteretic behavior.