A shock absorber is an important device for vehicle suspension. The semi-active suspension requires the damping or stiffness of the shock absorber to be controllable. This paper proposed a novel compact shock absorber with both damping and stiffness variable characteristics. The shock absorber is developed based on MR fluid through an innovative design. A prototype is tested by MTS to characterize the variable damping and stiffness properties. A mathematical model that incorporated the Bingham model is established and an optimization method is adopted to identify the parameters. The coherence of experiments and the proposed model verified the control ability of dual damping and stiffness of the shock absorber.