A reinforcing method for developing a kind of shear wall with both excellent self-centering capacity and high energy dissipation was presented, in which carbon fiber reinforced polymer (CFRP) bars or steel strands were longitudinally placed to provide a restoring effect, while magnetorheological (MR) dampers were externally coupled with wall panels to provide extra energy dissipation. To verify the feasibility of this method, three slender concrete walls were tested under reversed cyclic lateral loading while subjected to constant axial compression with an axial load ratio of 0.26, of which one was reinforced with CFRP bars, the second one was reinforced with CFRP bars and two external MR dampers, and the third one was reinforced with steel strands and two external MR dampers. The results indicated that the test walls possessed remarkable load-resisting capacities even when the lateral drift was as large as 1.8% as well as a lateral deformation recovery rate of 74%–89% after unloading. Owing to external MR dampers, the initial stiffness and ductility were increased by 28.3% and 29.8%, respectively. In addition, a specific quantitative analysis showed that the dampers could increase the cumulative energy dissipation of shear walls by 16.6%, of which the contribution provided by MR damper was 64.8%, confirming the effectiveness of MR dampers in improving energy dissipation while preserving the self-centering capacity.