In this paper, a self-sensing magnetorheological (MR) damper is proposed, prototyped and experimental evaluations. This proposed MR damper consists of a conventionally damper part and a self-sensing mechanism through compact structure design. The self-sensing mechanism based on electromagnetic induction is composed of cylindrical permanent magnets and self-sensing coils which move vertically. The mathematical algorithm is put forward to describe the self-sensing capability of the proposed MR damper. Meanwhile, the self-sensing ability and damping performance of the proposed MR damper are tested under different excitation frequencies and displacements. The results show that the proposed self-sensing MR damper has both good self-sensing ability and controllable damping capability.