The effect of addition of nanoparticles in irregular flake and spherical shaped particles based MR fluids and its influence on physical, magnetic and steady shear magnetorheological properties is investigated. For this, ferrofluids constitute of different volume concentration of Fe3O4 nanoparticles are used as a dispersion medium and constant amount of flake shaped iron particles are added. In order to verify the particle shape influence results are compared to spherical particle based fluids. Nanoparticles smoothens the surface of the flake shaped particles by magnetically attaching to it, this results into the decrement in viscosity. The reduction in the particle–carrier friction is the proposed reason of this observed result. The saturation magnetization of the flake based MR fluid shows 15% increment in value for the highest volume concentration of nanoparticles. In the present work, we have systematically studied the interaction between the nanoparticles and flake shaped micro particles and its influence in magnetorheology.