Magnesium ferrite (MgFe2O4) nanocrystal clusters were prepared by an ascorbic acid-assistant solvothermal method. The MgFe2O4 nanocrystal clusters with average diameter of 376 nm showed well-defined shape and homogeneous dispersion. The MgFe2O4-based magnetorheological (MR) fluid exhibited typical MR effect and enhanced sedimentation stability.