Poly(glycidyl methacrylate) (PGMA)-coated soft magnetic carbonyl iron (CI) particles were fabricated by cross-linking PGMA with ethylene glycol dimethacrylate. The synthesized core-shell structured CI/PGMA microspheres were characterized by scanning electron microscopy, Fourier transform infrared spectroscopy, and thermal gravimetric analysis. The CI particles were confirmed to be coated well with PGMA. A magnetorheological (MR) suspension was prepared based on the synthesized CI/PGMA particles dispersed in silicone oil and measured using a rotational rheometer at various magnetic field strengths. The sedimentation property, which was observed using a Turbiscan, indicated better settling stability than the pure CI particle-based MR suspension.