In this article, Bayesian approach is used for estimation of seismic fragility of un-anchored on-grade steel storage tanks based on historical data and American Lifeline Alliance tanks database. The approach properly accounts for epistemic as well as aleatory uncertainties. The point and interval estimates of the fragility are formulated based on structural reliability method that implicitly or explicitly reflects the influence of epistemic uncertainty. The fragility curves developed herein are compared to corresponding relations currently available in the technical literature, the comparison suggest that actual tank performance is better than that predicted in the literature. Finally, application of fragilities in loss estimation methodology is investigated and showing a considerable scatter in the results corresponding to different fragilities.