Magneto-rheological (MR) fluids have been an attractive field of study since the invention of the smart fluid. This paper presents the characterization and development of MR fluid prepared by immersing ferromagnetic elements in carrier oil. Micron-sized atomized iron and carbonyl iron surfaces are coated with guar and xanthan gum to counter issues with sedimentation, cluster formation, and cake formation of the MR fluid (MRF). A variety of MR fluid mixtures are organized by means of amalgamation of base fluids (Paraffin oil and silicone oil), ferromagnetic particles, and additives. The morphology of carbonyl iron has a flake-like structure and atomized iron dust forms a smooth granular configuration. MR fluid comprising Xanthan gum coated iron particles demonstrated enhancement in sedimentation. Additionally, by providing power, the magnetism of the magnetic piston is investigated, and discovered that magnetic flux density rises with the applied current in Ampere. The sedimentation results demonstrate that MR Fluid-4 and MR Fluid-3 enhanced the sedimentation rate substantially more than the others. Paraffin oil-based MR (MR Fluid-4) presented better viscosity than any other fluids. The fluid's high viscosity property contributes to increasing the resisting force of the MR damper system. Lastly, the performance of the MR damper is investigated by applying currents of 1A and 1.5A at various excitation velocities. MR damper enhances dampening force by 15% and decreases overall vibration acceleration by 30% when operating at 1.5A current. [ABSTRACT FROM AUTHOR]