Magnetorheological (MR) fluids offer solutions to many engineering challenges. The success of MR fluid is apparent in many disciplines, ranging from the automotive and civil engineering communities to the biomedical engineering community. The success of MR fluids continues to motivate current and future applications of MR fluid. One of the critical obstacles to progress in developing MR fluids has been a lack of understanding in the underlying mechanisms of magnetorheology. Because of the nonlinear and complex nature of controllable fluids, it seems likely that suitable modeling that can forecast the operation of MR devices will continue to play a significant role in the design optimization of these devices. In this thesis a multidisciplinary finite element analysis is performed involving magnetostatics and fluid flow analysis to study the behavior of the MR system, and to serve as basis for a multidisciplinary design optimization procedure. A finite element model was built to analyze and examine a 2-D axisymmetric MR damper (force-velocity diagrams). Comparison between finite element results and non-dimensional theory results shows good agreements. The results obtained from these tow approaches will help designers to create more efficient and more reliable MR dampers. Non-dimensional parameters of MR dampers that can affect on the non-dimensional plug thickness and equivalent viscous damping coefficient are then discussed. In addition, comparisons between mixed and flow mode dampers are undertaken using this non-dimensional parameters. The electro-magnetic components of an MR damper are characterized by multiple design variables. In this thesis first, the necessary background information about these variables are presented. Then an MR smart structure design method is presented according to the whole requirement of smart structure characteristics. “Multi objective function” method is used for design optimization of an automotive MR damper. In the last chapter of this thesis dynamic behavior of an MR damper as an element in a truss structure is analyzed to show the performance of these devices and effect of them on the vibration mitigation of mechanical structures. Around 32% decrease in amplitude for transient vibration of a 3D truss structure equipped with MR damper shows an excellent performance for these devices. Key words MR Damper, Finite Element Analysis, Design Optimization, Dynamic Response