In this work, the effect of particle shape (flakes) on the magnetorheological (MR) properties of an iron based MR fluid, constituted of two different volume fractions of particles dispersed in a liquid carrier, is studied. To compare the MR effect, spherical iron carbonyl particle based MR fluid is studied. In both MR fluids, linear viscoelastic behavior has been extensively investigated using small amplitude oscillatory analysis and magnetic sweep tests, in the presence and absence of a magnetic field (H). The amplitude sweep tests reveal that flake-based MR fluid shows a higher storage modulus compared to sphere-based MR fluid and saturates at a lower magnetic field strength. The variation of storage modulus with magnetic field strength shows an Hn dependence, where n varies from 2.2 to 2.4 for 20% volume fraction while it varies from 1.6 to 2 for a dilute sample. In the case of sphere-based MR fluid, at 20% volume fraction the variation of storage modulus is nearly linear with the magnetic field at low strain amplitude, and with increasing strain amplitude shows H2 dependence. At lower volume fraction in both cases, the loss modulus increases linearly with the magnetic field strength. The observed enhancement in the MR effect in the flake-based MR fluid is likely due to the stronger particle–particle interaction which results in higher friction between the particles. The sedimentation rate decreases by nearly 50% when flakes are used. The study reveals that one can use the irregular shaped particles for MR applications at low fields (~80 kA m−1).