The magnetorheological (MR) fluids contain magnetic micro-sized iron particles, non-magnetic-based fluid, and some additives in order to mitigate sedimentation and agglomeration. The various carrier fluids used in the preparation of MR fluids are mineral oil, silicon oil, castor oil, soybean oil, kerosene, synthetic oils, honge oil, organic oil, water-based oils, etc. However, for obtaining better vibration control, silicone oil is the most preferred one due to its higher viscosity index, lower friction characteristics, higher flash point, and higher shear strength. The MR fluids have various application areas such as dampers, prosthetic knees, valves, brakes, clutches, finishing processes etc. The dampers containing MR fluids are used in automobile cushioning for enhancing passenger comfort and MR suspensions significantly improve steering stability in vehicles. In case of MR brakes, the braking torque on the rotating disks is controlled using the generated shear stress. The carbonyl iron (CI) particles exhibit better rheological characteristics as compared to electrolytic iron (EI) particles. The use of MR fluids produces stable and natural limb movement in orthoses, lower limb prostheses, and exoskeletons. The MR fluids also prove to be very significant in polishing applications. There are various issues with preparation methods and difficulties in the storage of MR fluids. The problems encountered in the synthesis of MR fluids include sedimentation, agglomeration, in-use thickening, corrosion, erosion, etc. The impact of particle proportion, particle shapes, and size has been influential in evaluating MR characteristics. The viscosity and shear stress of MR fluid have been mitigated at higher values of temperature and even CI particles get oxidized at higher temperatures. The CI particles as compared to EI particles are the majority favourable particles used for dispersing state within the MR fluids due to their higher value of saturation magnetization, more availability, and lesser cost. The small-sized particles led to lower wettability, whereas larger-sized particles accounted for an increased sedimentation rate. The currently available MR fluids cost is still on the higher side and the preparation of economical MR fluid is still a big challenge for the researchers. The MR fluids storage is also a big concern. The future scope of MR fluid may be in heavy industries such as nuclear, shipbuilding, oil and gas, space and aviation, etc. to achieve the desired damping response.