We review core/shell structured magnetic carbonyl iron (CI)/polymer hybrid particles fabricated with various polymeric systems and their magnetorheological (MR) characteristics when dispersed in non-magnetic suspending medium. Their morphology and magnetization properties are compared with those from different fabrication methodologies. Rheological characteristics of the MR fluids, exhibiting improved dispersion stability compared to the pure CI based MR fluid, are presented along with their potential engineering applications.