The elastic modulus and shear stress of the Fe-PU Magneto Rheological Elastomers (MRE) have been mechanically characterized by a custom made experimental set up attached with the conventional Universal Testing Machine (UTM). This set up has the ability to generate magnetic field on its own so as to influence the size of the particle and volume fraction of the MRE. The size of the particle used in this study is 15μm. The sample with the dimension 10×15×5 mm3 has been used in this study. It has been observed that the regular arrangement of magnetic moments in Fe and its suspension in MRE lead to the enhancement of stress. As a result, the stress amplitude increases and it indicates that the stiffness of the MREs can be increased by applying magnetic field. The Atomic Force Microscopy (AFM) confirms the presence of the columnar structure of the magnetic moment in MRE. It is suggested that this type of MRE could be used as vibration dampers. © 2009 IEEE.