A lightweight modular two-way steel floor system has been previously developed in a bid to make modern structures more environmentally and economically sustainable. The floor system comprises individual panels fabricated from orthogonally arranged light-gage purlins sandwiched between two light-gage plates and uses no intermediate hot-rolled beams within a structural bay. The panels are assembled within a steel frame by screwing the panels together and connecting them along the perimeter to the supporting girder using powder-actuated fasteners. This research is the one of the first using a high-fidelity finite element (FE) approach with the ability to capture the cyclic response of fasteners to explore the diaphragm behavior of the floor system under lateral cyclic loading. Ten (10) high fidelity non-linear finite element (FE) models representing a full-scale (12.2 m × 9.1 m) cantilever diaphragm have been developed in Abaqus CAE. The models’ geometric parameters are selected to cover variations in plate thickness and purlin depth in the floor system. A user-element (UEL) sub-routine capable of predicting the non-linear hysteresis behavior of both interior and perimeter fasteners including pinching, strength and stiffness degradation has been used to approximate the behavior of the fasteners in the floor system. A uniformly distributed gravity live load is initially applied to the floor system to establish adequate gravity load carrying capacity. A lateral cyclic displacement protocol is also applied for which the hysteresis behavior has been measured. The diaphragm shear load capacity obtained from the hysteresis is compared to shear load capacity computed using provisions from the SDI Diaphragm Design Manual. The diaphragm capacities recorded from the hysteresis behavior show close agreement with the capacities computed using the SDI provisions. From the hysteresis plots of the respective models, the diaphragm shear stiffness, unit shear strength, energy dissipation, and response mode of the floor diaphragm have been computed and described. It was observed that the characteristic properties are influenced more by the plate thickness than the purlin depths. Additionally, the hysteretic response of the diaphragm to the loading also matched predictions based on the diaphragm geometric parameters, fastener properties, and layout. The results of this study imply that the floor system has the ability to provide an alternative energy dissipation source for seismic force resisting systems.