Based on conventional vane hydraulic damper, a new vane magneto-rheological fluid damper (MRFD) is designed according to “fail-safe” principle. The damping moment calculate model and adjustable coefficient are deduced and analyzed, which provides theoretic foundation for MRFD design. Limited by structure and space, the magnetic circuit design and optimization is the difficulty in altera tion, as well as the cornerstone of MRFD performance. In the process of MRFD design, three-dimensional nonlinear finite element analysis of magnetic field is applied based on FEM, and find that the magnetic core becomes the bottleneck of magnetic circuit. Windings installed in fixed space are optimized by simulation method so that the magnetic induction of damping gap is improved. The simulation results indicate that the MRF leaking from non-preset gap may be controlled，meaning that this designing precept can enlarge the damping adjustable rang of MRFD and enhance its reliability. The experimental results show that the designed MRFD has a stable performance and good ability of energy dissipation which the practical application requires.