Above a critical shear rate we observe in suspensions polarized by an external field an abrupt jump of stress and the onset of a layered stripe pattern. This novel shear-induced transition can be systematically found by using appropriated geometry. We show that it can be explained by the transition from a nematiclike order induced by the field to an isotropic state which is obtained when the shearing hydrodynamic forces on a pair of particles overcome the magnetic or electrostatic forces. The critical shear stress predicted on this basis is in good agreement with the experimental results.[S0031-9007(98)08119-8] PACS numbers: 82.70.Kj, 83.80.Gv Electrorheological (ER) and magnetorheological (MR) fluids are suspensions of highly polarizable particles in a nonconducting oil. In the presence of an electric or of a magnetic field the attractive dipolar interaction in the direction of the field induces the formation of a solid network of particles which can sustain a stress without flowing. This fundamental change of rheology being electronically controlled, these fluids are very attractive for applications in active damping and many others fields [1][2][3]. For the sake of simplicity, the rheology of these fluids is very often characterized by a Bingham law: t t s 1 h ᠨ g; although a Casson law or other power laws can often better describe their rheological behavior [4,5].Actually, a good model should take into account the shear rate dependence of the average length of the transient aggregates by using a balance between the hydrodynamic and dipolar forces and some attempts have been done in this direction at low volume fractions [6,7].In order to obtain accurate rheological measurements on magnetic fluids, we have used a cone-plate geometry which has the advantage-relative to the more usual plate-plate geometry-of a constant shear rate inside the cell. In this geometry we have found a jump of stress at a critical shear rate, and we have observed that this jump of stress was related to the onset of a layered structure. To account for these unexpected results we propose a novel mechanism of phase separation which couples the disappearance of oriented chains of particles to the onset of attractive forces in the plane defined by the velocity and the field.Samples.-We have prepared fluids which are made of spherical particles with a rather good monodispersity. For MR fluids the magnetic particles are made of polystyrene containing magnetite inclusions. These particles are manufactured by Rhone-Poulenc for protein separation. They have an average diameter of 0.5 mm and a standard deviation of 10% measured by light scattering and are suspended in a mixture of water and glycerol in order to increase the zero field viscosity of the suspension. The permeability of the particles as a function of the magnetic field has been obtained from a measurement of the magnetization at a volume fraction of 4.7% and by using the Maxwell-Garnett theory [8], which is well adapted for low volume fraction. The ER fluid we have used is made fr...