Magnetorheological (MR) fluids are fluids whose properties vary in response to an applied magnetic field. Such fluids are typically composed of microscopic iron particles ( diameter, by volume) suspended in a carrier fluid such as mineral oil or water. MR fluids are increasingly proposed for use in various mechanical system applications, many of which fall in the domain of tribology, such as smart dampers and clutches, prosthetic articulations, and controllable polishing fluids. The goal of this study is to present an overview of the topic to the tribology audience, and to develop an MR fluid model from the microscopic point of view using the discrete element method (DEM), with a long range objective to better optimize and understand MR fluid behavior in such tribological applications. As in most DEM studies, inter-particle forces are determined by a force-displacement law and trajectories are calculated using Newton’s second law. In this study, particle magnetization and magnetic interactions between particles have been added to the discrete element code. The global behavior of the MR fluid can be analyzed by examining the time evolution of the ensemble of particles. Microscopically, the known behavior is observed: particles align themselves with the external magnetic field. Macroscopically, averaging over a number of particles and a significant time interval, effective viscosity increases significantly when an external magnetic field is applied. These preliminary results would appear to establish that the DEM is a promising method to study MR fluids at the microscopic and macroscopic scales as an aid to tribological design.