This paper presents the results of uniaxial and triaxial shake table tests performed on directly anchored and base isolated steel pallet storage racks loaded with simulated and real merchandise. The new base isolation system provides seismic isolation in the cross-aisle direction of a rack only, while providing similar restraints as conventional bolted base plates in the down-aisle direction. The objective of the isolation in the cross-aisle direction is to reduce the horizontal accelerations of the rack in order to reduce content spillage and structural damage during a major seismic event, without interfering with normal material handling operations. Base isolation is not provided in the down-aisle direction since the range of down-aisle natural periods of typical rack structures is already similar to that of typical base isolated structures. The results of the seismic tests clearly demonstrated the improved structural performance of rack structures incorporating the new cross-aisle base isolation system. Cross-aisle absolute accelerations and interstory drifts of the base isolated rack structure were reduced considerably compared to the values measured in the same rack conventionally anchored at its base. The base isolation system also had an effect in reducing the down-aisle accelerations. The base isolated racks met the performance objectives recommended in the FEMA 460 document “Seismic Considerations for Steel Storage Racks Located in Areas Accessible to the Public” both for life safety under the Design Earthquake (DE) and for collapse prevention under the Maximum Considered Earthquake (MCE).