Magnetorheological (MR) fluids are new iron-based materials, whose applications include brakes, dampers, clutches, shock absorbers systems and polishing of optical surfaces (lens and mirrors). They are dependent on the size and shape of particles as the magnetic properties. Interested in the possibility of using iron-rich powders, commonly used in nondestructive testing, ranging in size from a few μm to about 200 μm and lower cost than those commercially used for MR fluids, a study of the structural and magnetic properties of iron-rich metallic particles by X-ray diffraction (XRD) and Mossbauer spectroscopy (MS) at room temperature has been done. Powders, as received, were separated into particle sizes smaller than 20 μm (sample A) and in the range of 20–38 μm (sample B) because these are the sizes generally required for applications in MR fluids. The particles whose sizes exceed the above values were ground in a high energy planetary mill for 3 h, using different values of rotational speed/time: 200 rpm for one hour, a pause of 10 s, 140 rpm for one hour, pause 10 s and then 175 rpm during the last hour. These powders were sieved to obtain particles smaller than 20 μm (sample C). According XRD results, in all samples, only α-Fe (lattice parameter a = 2,867(2) A) and Fe2O3 (lattice parameter a = 5,037(1) A and c = 13,755(8) A) were present. The Mossbauer spectra were fitted with two sextets. The hyperfine parameters values allowed us to assign the highest relative area spectrum (sextet) corresponding to α-Fe and the second one to Fe2O3 in accord to the XRD results. Thus, the preparation method using mechanical milling for diminishing the size of the metallic particles allowed us to get particles with size and magnetic properties that could lead to potentially MR fluids applications.