In this study, a new mesoporous material with semiconducting polypyrrole (PPy) encapsulated in the channels of mesoporous silica (MCM-41) was synthesized and used as dispersed phase for electrorheological (ER) fluids. Rheological and dielectric properties of PPyMCM-41 based suspensions were investigated with the conclusion that PPy-MCM-41 fluid exhibits better ER behavior than that without PPy. The static yield stress of 10 wt.% PPy-MCM-41 fluid as a function of applied electric field strength shows two different slopes depending on the electric field strength. Furthermore, the dielectric spectra indicate that encapsulated PPy increases the interfacial polarizability of mesoporous material and induces a higher ER effect. (c) 2006 Elsevier Inc. All rights reserved.