Employing nonequilibrium molecular‐dynamics methods the effects of two energy loss mechanisms on viscosity, stress, and granular‐temperature in assemblies of nearly rigid, inelastic frictional disks undergoing steady‐state shearing are calculated. Energy introduced into the system through forced shearing is dissipated by inelastic normal forces or through frictional sliding during collisions resulting in a natural steady‐state kinetic energy density (granular‐temperature) that depends on the density and shear rate of the assembly and on the friction and inelasticity properties of the disks. The calculations show that both the mean deviatoric particle velocity and the effective viscosity of a system of particles with fixed friction and restitution coefficients increase almost linearly with strain rate. Particles with a velocity‐dependent coefficient of restitution show a less rapid increase in both deviatoric velocity and viscosity as strain rate increases. Particles with highly dissipative interactions result in anisotropic pressure and velocity distributions in the assembly, particularly at low densities. At very high densities the pressure also becomes anisotropic due to high contact forces perpendicular to the shearing direction. The mean rotational velocity of the frictional disks is nearly equal to one‐half the shear rate. The calculated ratio of shear stress to normal stress varies significantly with density while the ratio of shear stress to total pressure shows much less variation. The inclusion of surface friction (and thus particle rotation) decreases shear stress at low density but increases shear stress under steady shearing at higher densities.