This paper presents a novel Adaptive Tuned Vibration Absorber (ATVA) using the enhanced magnetorheological elastomers (MREs) for powertrain vibration reduction. The MRE material used in this application includes micro-sized iron particles enhanced by adding nano-sized magnetic powders. With the enhancement, MRE’s elastic modulus significantly increases due to the MR effect. In the new ATVA, the MRE plays a role as a torsional spring whose stiffness coefficient can be varied with an external magnetic field. Additionally, this ATVA could operate in shear-squeeze mode rather than shear mode. Thus, the frequency range is much wider than that of general MREs. Such property of the enhanced MRE is an advantage for constructing a smart ATVA for powertrain vibration control because the ATVA can work effectively in a wide frequency range instead of a narrow bandwidth as a conventional dynamic absorber does. Numerical simulations of a powertrain system for the second and third gear fitted with the ATVA are used to validate its effectiveness. The obtained results show that the powertrain vibration can be greatly suppressed. Particularly, the ATVA is effective in reducing the powertrain vibration not only in case of the single harmonic excitation but also for the case of the multi-harmonic excitation. Furthermore, the simulation results can be used to optimize the ATVA’s design, which will be our next work.