In this work, we describe methods for the preparation of suspensions of micron-sized iron particles grafted with different surfactants. The aim is to obtain well-dispersed magnetorheological (MR) fluids. The effectiveness of the surfactants as dispersants was analyzed quantitatively by means of rheological measurements. With this objective, the viscosity of the suspensions was measured, and the results were compared with the prediction of the Batchelor's formula (Batchelor, J Fluid Mech 83:97-117, 1977). The effect of dispersion on the MR properties of the suspensions was also studied. It was found that the quality of the dispersion of a suspension does not have an important effect on the magnitude of the field-induced yield stress but does on the change of viscosity induced by the field. It was also found that the transition from the solid-like state to the liquid-like one happens very smoothly for well-dispersed suspensions, contrarily to the abrupt transition for poorly dispersed suspensions.