We use particle level dynamic simulations, ultrasonic characterization, and rheomicroscopy to investigate the yielding behavior of magnetorheological (MR) fluids under oscillatory shear in both dilute and concentrated regimes. Dilute suspensions exhibit a single peak in the elastic stress that is associated to the breaking of the field-induced structures at the flow point (G' = G ''). On the other hand, more concentrated suspensions demonstrate a two-step yielding that is associated to the existence of short-ranged attractions between the particles, possibly coming from remnant magnetization or van der Waals forces. This two-step yielding is demonstrated by introducing additives in the formulation of the MR fluids and performing particle level simulations that include R-shifted Lennard-Jones potentials of interaction. (C) 2014 The Society of Rheology.