In particle-laden turbulent flows, it is established that the turbulence in the carrier fluid phase gets affected by the dispersed particle phase for volume fractions above 10−4. Hence, reverse coupling or two-way coupling becomes relevant in that volume fraction regime. Due to their greater inertia, larger particles change either the mean flow or the intensity of fluid-phase fluctuations. In a recent study [Muramulla et al., “Disruption of turbulence due to particle loading in a dilute gas–particle suspension,” J. Fluid Mech. 889, A28 (2020)], a discontinuous decrease of turbulence intensity is observed in a vertical particle-laden turbulent channel flow for a critical volume fraction O(10−3) for particles with varying Stokes numbers (St) in the range of 1−420 based on the fluid-integral time scales. The collapse of turbulent intensity is found out to be the result of a “catastrophic reduction of turbulent energy production rate.” Mechanistically, a turbulent Couette flow differs from a pressure-driven channel flow in many ways, such as fluid-phase mean-velocity profile and turbulent coherent structures. In the particle-laden Couette flow, particles are treated as neutrally buoyant. Therefore, it is worth investigating the mechanism of turbulence modulation by inertial particles in the particle-laden turbulent Couette flow. In this article, the turbulence modulation in the fluid phase in the presence of inertial particles is investigated using two-way coupled direct numerical simulations of a particle-laden sheared turbulent suspension. The particle volume fraction (ϕ) is varied from 1.75×10−4 to 1.05×10−3 and the Reynolds number based on the half-channel width (δ) and the wall velocity (U) (Reδ) is 750. The particles are of high inertia with St∼367 based on a fluid integral timescale represented by δ/U. A discontinuous decrease in turbulence intensity and Reynolds stress is observed beyond a critical volume fraction ϕcr∼7.875×10−4. The drastic reduction of shear production of turbulence leads to the collapse of fluid-phase turbulence. The stepwise particle injection and stepwise removal study confirm the role of critical volume loading in the discontinuous transition. Additionally, the effect of the nature of particle–particle and particle–wall collisions has been investigated. It is observed that the inelastic collisions increase the ϕcr marginally although the nature of turbulence modulation remains similar. The explicit role of the inter-particle collisions has also been investigated by switching off the particle–particle collisions. In this case, ϕcr increases more than in the case of an inelastic collision. The turbulence modulation carries the signatures of transition from sheared turbulence to particle-driven fluid fluctuation at higher volume loading.