Semiconducting tin dioxide particles were covered with insulating layer and its effect on electrorheological (ER) properties of the suspensions was examined under oscillatory and steady shear. When the particles were coated with titanium dioxide by hydrolyzing titanium tetraisopropoxide and heat‐treated at 600 °C, the suspension in a silicone oil showed a high yield stress at an electric field of 2.0 kV mm−1. However, since the titanium dioxide layer was semiconducting, the current density was about 0.2 mA cm−2and would not be applicable to practical device. Using aluminium ion, the titanium dioxide can be doped from a semiconducting to an insulating state. The particles covered with surface layer consisting of titanium dioxide and aluminum oxide provided excellent ER fluids in water‐free systems. The coating of semiconducting particles by hydrolysis of alkoxides is very useful for surface modification of particles to improve the ER performance of suspensions.