In the abstract d20 combat system, a character’s armor defends him by reducing the chance that an attack will deal damage. That system simplifies the realities of battle in order to streamline combat resolution. An attack that fails due to a character’s armor or natural armor doesn’t really fail to connect, but rather fails to connect with enough force to deal any damage. (That’s what touch attacks ignore a character’s armor and natural armor—the touch attack only needs to connect to deliver its effect, and need not actually breach the target’s armor.)
If you’re willing to add a layer of complexity to your combats, consider this variant. In this system, armor reduces the amount of damage dealt by an attack instead of merely turning wouldbe hits into misses. Armor still prevents some hits outright, but also reduces the deadliness of attacks that do connect. In essence, the system “gives up” some of armor’s ability to turn hits into misses in exchange for a small reduction in damage dealt by any given attack.
It’s pretty easy to see the effect of this variant system: attacks hit more often, but do less damage. What does that really mean?
Lowlevel combat tends to be less dangerous for armored characters. Although their ACs are lower (and thus their chance of being damaged is higher), this is more than offset by the reduced damage suffered by attacks. A typical goblin warrior, for instance, can barely hurt a character wearing splint mail, because the armor’s damage reduction entirely negates the damage dealt by an average hit. Even though the goblin will hit more often, it will likely end up dealing less total damage over the course of a typical battle.
A midlevel fighter in full plate armor must still be cautious when fighting an ogre, but his armor reduces the ogre’s average damage by 25% while only increasing its chance to hit by 20%—a net gain for the fighter.
At higher levels, however, the balance shifts back in favor of monsters that deal large amounts of damage per hit. When facing a Huge earth elemental, a fighter in full plate will be hit 20% more often (due to the 4point reduction in AC), but his 4 points of damage reduction now only reduces his opponent’s average damage by less than 17%. Advantage: elemental. Thus, highlevel characters must be more careful when battling monsters with extreme damagedealing capability.
You can combine the defense bonus variant and the armor as damage reduction variant in a variety of ways to create a more complex system.
Using both systems as written, many characters will wear armor even if the armor bonus provided is lower than the defense bonus gained from class level. Because the character gets the higher of his defense bonus or armor bonus, the character can wear armor and benefit from its damage reduction while relying on his defense bonus for a higher Armor Class.
If that’s not to your liking, you can rule that a character’s armor bonus overrides his defense bonus, even if the defense bonus is higher. This forces characters to make a tough choice between having a high AC and having damage reduction.
Armor  Armor Bonus^{1} 
Damage Reduction 



Light armor  
Padded  +1  none 
Leather  +1  1/ 
Studded leather  +2  1/ 
Chain shirt  +2  2/ 
Medium armor  
Hide  +2  1/ 
Scale mail  +2  2/ 
Chainmail  +3  2/ 
Breastplate  +3  2/ 
Heavy armor  
Splint mail  +3  3/ 
Banded mail  +3  3/ 
Halfplate  +4  3/ 
Full plate  +4  4/ 
In this system, armor offers two benefits against attacks: a minor bonus to AC, which functions just like the armor bonus in the standard d20 rules but is usually lower in value; and damage reduction. See Table: Armor and Damage Reduction for the armor bonus and DR values for common armor types. (All other armor statistics, such as maximum Dexterity bonus, armor check penalty, and arcane spell failure chance, are unchanged.)
For armors not covered on Table: Armor and Damage Reduction, you can determine the new armor values and damage reduction based on the standard armor bonus. To determine the armor’s damage reduction, divide the armor’s normal armor bonus by 2 (rounding down). To determine the armor’s new armor bonus, subtract the DR from the normal armor bonus. For example, studded leather has a normal armor bonus of +3. That gives it a DR of 1/ (half of 3, rounded down) and a new armor bonus of +2 (3 minus 1).
An armor’s enhancement bonus (if any) increases its armor bonus to AC, but has no effect on the armor’s damage reduction. A +3 chain shirt, for example, adds +5 to AC and grants damage reduction 2/.
The damage reduction granted by armor stacks with other damage reduction of the same type (that is, damage reduction that has a dash after the number). A 7thlevel barbarian wearing a breastplate has DR 3/ (1/ from his class levels and 2/ from his armor). A fighter wearing full plate armor who is the target of a stoneskin spell, however, has DR 4/ from the armor and 10/adamantine from the spell.
Shields function normally in this variant, granting their full shield bonus to AC. Unlike with armor, a shield’s effectiveness is measured wholly by its ability to keep an attack from connecting with your body.
Natural Armor Bonus 
Damage Reduction 
Subtract from Natural Armor 

04  none  0 
59  1/  1 
1014  2/  2 
1519  3/  3 
2024  4/  4 
2529  5/  5 
3034  6/  6 
3539  7/  7 
4044  8/  8 
A creature’s natural armor also provides a modicum of damage reduction. Divide the monster’s natural armor bonus (not including any enhancement bonus) by 5 to determine the monster’s damage reduction. The same value is subtracted from the monster’s natural armor bonus to find the monster’s new AC. These calculations are summarized in Table: Natural Armor and Damage Reduction.
If the creature already has damage reduction, either add the value gained from natural armor (if the existing damage reduction is of the same type) or treat it as a separate DR value (if it is of a different type).
For example, a mummy normally has a natural armor bonus of +10. This gives it DR 2/, and its natural armor bonus is reduced by 2 points to +8 (making it’s AC 18). Since the mummy already has DR 5/ as a special quality, its total damage reduction becomes DR 7/.
A mature adult red dragon has a natural armor bonus of +24. This gives it DR 4/, and its natural armor bonus is reduced by 4 points to +20 (making its AC 28). The dragon’s existing damage reduction is 10/magic, so the two damage reduction values remain separate.
Finally, a frost giant has a +9 natural armor bonus, so it gains DR 1/ from natural armor. The chain shirt it wears gives it an additional DR 2/. If the frost giant were a 7thlevel barbarian, the barbarian class levels would give it DR 1/. These three values add up to DR 4/. The giant’s AC would be 20 (10, +8 natural armor bonus, +2 chain shirt).