A novel concept based on advanced particle-grafting technology to tailor performance, damping, and surface properties of the magnetorheological elastomers (MREs) is introduced. In this work, the carbonyl iron (CI) particles grafted with poly(trimethylsilyloxyethyl methacrylate) (PHEMATMS) of two different molecular weights were prepared via surface-initiated atom transfer radical polymerization and the relations between the PHEMATMS chain lengths and the MREs properties were investigated. The results show that the magnetorheological performance and damping capability were remarkably influenced by different interaction between polydimethylsiloxane chains as a matrix and PHEMATMS grafts due to their different length. The MRE containing CI grafted with PHEMATMS of higher molecular weight exhibited a greater plasticizing effect and hence both a higher relative magnetorheological effect and enhanced damping capability were observed. Besides bulk MRE properties, the PHEMATMS modifications influenced also field-induced surface activity of the MRE sheets, which manifested as notable changes in surface roughness.