Conducting polymer-coated nanoparticles used in electrorheological (ER) and magnetorheological (MR) fluids are reviewed along with their fabrication methods, morphologies, thermal properties, sedimentation stabilities, dielectric properties, and ER and MR characteristics under applied electric or magnetic fields. After functionalization of the conducting polymers, the nanoparticles exhibited properties suitable for use as ER materials, and materials in which magnetic particles are used as a core could also be applied as MR materials. The conducting polymers covered in this study included polyaniline and its derivatives, poly(3,4-ethylenedioxythiophene), poly(3-octylthiophene), polypyrrole, and poly(diphenylamine). The modified nanoparticles included polystyrene, poly(methyl methacrylate), silica, titanium dioxide, maghemite, magnetite, and nanoclay. This article reviews many core-shell structured conducting polymer-coated nanoparticles used in ER and MR fluids and is expected to contribute to the understanding and development of ER and MR materials.