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A magnetorheological (MR) fluid, suspension of soft magnetic carbonyl iron (CI) dispersed in a mixture medium of grease and kerosene, was prepared, focusing on controlling the medium viscosity for better dispersion of CI. While the grease was chosen because it is relatively cheap and easy to obtain, the kerosene was used as a rheology-modifier to control shear viscosity of the grease medium for better dispersion system. Rheological properties of CI based MR fluids including storage and loss modulus, shear viscosity and shear stress were examined from both steady shear and oscillation tests with and without magnetic fields applied. Both yield stress and relaxation modulus obtained exhibit their solid-like characteristics.