We synthesized new polyaniline (PANI)/organoclay (aminosilane surface-treated) nano-composite particles and prepared electro-rheological (ER) thirds by dispersing the particles in silicone oil. A distinct enhancement in yield stress was observed due to the presence of PANI-coated clay particles. The effects of delaminated clay on the ER yield stress were investigated and compared with other ER fluid systems, which use PANI particles only or a simply intercalated PANI/clay nano-composite.