Abstract. The substantial sedimentation problem of magnetorheological (MR) suspensions, due to the large density mismatch between dispersed particles and carrier medium, is a significant obstacle for their broader applications. The present paper reports the MR properties and enhanced sedimentation stability of novel core-shell structured particles with carbonyl iron as a core and polypyrrole as a shell layer dispersed in silicone oil. The coating morphology was analyzed via scanning electron microscopy and magnetic properties via vibrating sample magnetometry. The steady shear flow and small-amplitude dynamic oscillatory shear measurements were carried out to show improved MR performance. The sedimentation test showed positive role of polymeric coating, as well.