A surface modifier, which has lipophilic groups and chelating groups, was synthesized, and used to modify the surface characteristics of carbonyl iron particles and prepare composite magnetic particles (CMPs). Then a set of oil-based magnetorheological (MR) fluids based on the CMPs were prepared. Finally, the relationship between thermal conductivity and concentration of MR fluids were studied, and an analysis model on thermal conductivity and concentration of MR fluids was built. The result shows that there is a linear correlation between thermal conductivity and concentration of MR fluids, namely k eff ¼ 0.0245 F À 0.08 and k eff /k f ¼ 0.167 F À 0.53 (10 F 50). Applying this model, the concentration variation of the MR fluids can be acquired on the basis of the thermal conductivity variation, and the model can be used to evaluate the sedimentation stability of the MR fluids.