A nonlinear mathematical model of a magnetic bearing system has been obtained by applying a modified conventional identification technique based on the principle of harmonic balance. In this study, we examined the rich nonlinear dynamics of a magnetic bearing system with closed-loop control using phase portraits, Poincaré maps, and frequency spectra. The resulting bifurcation diagram can be used to evaluate the operational range of systems employing nonlinear actuators. Estimates of the largest Lyapunov exponent based on the properties of synchronization revealed the occurrence of chatter vibration indicative of chaotic motion. Various control methods, such as the state feedback control and the injection of dither signals, were then used to quench the chaotic behavior.