Conducting polypyrrole (PPy)-wrapped halloysite nanotube (HNT) nanocomposites (PPy/HNT) were prepared using an in situ polymerization process of pyrrole monomer in the presence of a HNT dispersion, and its electrorheological (ER) properties were investigated under applied electric fields. The morphology of both HNT and PPy/HNT nanocomposite was examined by scanning electron microscopy and transmission electron microscopy. The synthesized PPy/HNT nanocomposites were also analyzed using a physisorption analyzer, Fourier-transform infrared spectroscopy, and thermogravimetric analysis. The ER properties of the PPy/HNT nanocomposite dispersed in silicone oil measured using a rotational rheometer under different electric field strengths exhibited ER behaviors of shear stress, dynamic moduli, and relaxation modulus with a change in slope from 1.5 to 1.0.