Magnetorheological (MR) fluid is a kind of typical smart material whose stability, viscosity, and shear yield stress are three important performance indexes. In this study, in order to acquire high performance MR fluid, two kinds of coated magnetic particles, multiwalled carbon nanotubes- (MWCNTs-) coated magnetic particles and surfactant-modified magnetic particles, are prepared and their performances, such as density and magnetic properties, are investigated. A group of MR fluids based on mixing coated magnetic particles with different mixing ratios of coated magnetic particles, different volume fractions, and different dosages of thixotropic agent are experimented considering their sedimentation stability, rheological properties, and shear yield stress. The results show that the coated magnetic particles have a lower density and relatively high saturation magnetization, which will benefit the antisettlement behavior of MR fluids; and the mixing ratio of coated magnetic particles, volume fractions, and dosage of thixotropic agent all have effects on the properties of MR fluids. At the same time, an initial tilt chain model of MR fluids based on mixing coated magnetic particles is proposed to describe the properties of MR fluids at the microlevel, and the numerical values of the shear yield stress fit well with the experimental values.