The present study is devoted to ultrasonic characterization of Si-oil based magneto-rheological (MR) fluid. Initially, the structural, morphological and magnetic properties of carbonyl iron powder have been carried out by its X-ray diffraction (XRD), scanning electron microscope (SEM), SEM-energy dispersive X-ray analyser (SEM-EDX) and vibrating sample magnetometer (VSM) measurements. The cubic structure with lattice parameter 2.841 Å of powdered material is confirmed by XRD study while spherical particle content is confirmed by SEM measurement. The VSM measurement of powder endorses the smooth magnetization and demagnetization with no remnance and coercivity. The rheological and ultrasonic properties are measured for pure Si-oil and four synthesized MR fluids having 10–40 wt% of carbonyl iron powder. The density and viscosity of synthesized MR fluid is found to enhance with weight percentage of carbonyl iron powder. In absence of magnetic field, the longitudinal ultrasonic velocity is found to decay with temperature and concentration. In presence of magnetic field, the longitudinal ultrasonic velocity is found to enhance while velocity measured at transverse magnetic field is found to decay for each MR fluid. The change in ultrasonic velocity with concentration at fixed temperature or magnetic field resembles the magnetization characteristics of disperse powder in MR fluid. The study opens a new dimension for its characterization through ultrasonic non-destructive technique.