The average age of in-service bridges has increased in recent years in the United States. To address this issue, structural health monitoring and damage identification approaches can be employed to prioritize maintenance/replacement of aging bridges. Among the damage identification and operational health monitoring approaches, finite element (FE) model updating methods can offer a solution to evaluate the mechanics-based characteristics of bridges. However, in a real-world setting, unidentifiability and mutual dependency between model parameters, modeling errors, especially due to boundary conditions, as well as ill-conditioning of updating algorithms can pose challenges to the application of FE model updating methods. To address these challenges, this study presents a two-step FE model updating approach. In the first step, modal-based model updating is used to estimate linear model parameters mainly related to the stiffness of boundary conditions and material properties. In the second step, in order to refine parameter estimation accounting for nonlinear response behavior of the bridge, a time-domain model updating is carried out. In this step, boundary conditions are fixed at their final estimates using modal-based model updating. To prevent the convergence of updating algorithm to local solutions, the initial estimates for nonlinear material properties are selected based on their corresponding final estimates in the modal-based model updating. To validate the applicability of the two-step FE model updating approach, a series of forced-vibration experiments are designed and carried out on a pair of decommissioned and deteriorated prestressed bridge I-girders. After carrying out the two-step FE model updating, the final estimates of concrete compressive strength are shown to provide reasonable assessment of the damage extent in the girders.