To reuse the energy dissipated by vehicle suspension, a semi-active suspension with a self-powered magneto-rheological damper is proposed. An electromechanical coupling model of self-powered semi-active suspension is established. The energy conversion efficiency is defined and investigated by changing the electrical parameters. By considering unmodeled dynamics and perturbation values, an adaptive optimal fault-tolerant control algorithm is proposed to ensure the vibration-isolation performance. The robust index of the adaptive optimal fault-tolerant control algorithm is constructed using the Lyapunov equation and evaluated by changing the key parameters. The sensitivity of the key parameters to the damping force is investigated using a grey relation analysis approach. Furthermore, multi-objective optimization between the vibration-isolation capability and energy harvesting is conducted. Via analysis, the proposed suspension can harvest more energy near the second resonance range. Compared to passive control and self-powered mode, the adaptive optimal control algorithm mitigates vibration more significantly in the time and frequency domains, respectively, under stochastic excitation. The robust index is most sensitive to inductance and the diameter of the magnetism cylinder. The length of the damping channel and the diameter of the magnetism cylinder influence the sensitivity of key parameters to the damping force most obviously.