One of the main parts in hydraulic system is directional control valve, which is needed in order to operate hydraulic actuator. Practically, a conventional directional control valve has complex construction and moving parts, such as spool. Alternatively, a proposed Magneto-rheological (MR) directional control valve can offer a better solution without any moving parts by means of MR fluid. MR fluid consists of stable suspension of micro-sized magnetic particles dispersed in carrier medium like hydrocarbon oil. The main objectives of this present research are to design a MR directional control valve using MR fluid, to analyse its magnetic circuit using FEMM software, and to study and simulate the performance of this valve. In this research, a comprehensive literature review on the advancement of this technology provides valuable insight on MR valve design by previous researchers. The design of MR directional control valve, the construction of the valve and the principle of work are presented. The design of proposed MR single valve has enabled the development of the MR directional control valve. Design and finite elements analysis using FEMM software of the MR single valve and MR directional control valve were done to obtain the optimal design. The valve was fabricated and the experimental rig for valve test was developed. The experiment presentation for functional working principle of the valve and valve performance were shown. The results of the simulation results show that the valve works in controlling the direction and the speed of hydraulic actuators. The valve can be operated with variable flow rate by varying the electric current. It is found that the electric current is inversely proportional to the flow rate. High current produces low flow rate and vice versa. It does the work of the valves to proportionally control the hydraulic actuators. The valve can be operated as ON-OFF directional control valve as well as proportional directional control valve with meter-in or meter-out by changing electric connection.