State space model of stayed cable—magnetorheological damper vibration reduction control system was constructed based on Halmiton principle. Taking the main bridge C20 stayed-cable in Ningbo as the research object, the matrix parameters of the state space equations was analyzed and calculated by using the Rayleigh theory. Thus, based on the state space equation and stochastic control system theory, the vibration reduction control algorithm with state variance performance constrain for stayed cable—magnetorheological damper system was analyzed in detail. Simulation results showed that the given vibration reduction control algorithm could guarantee the stability of stayed cable—magnetorheological damper system and receive effective constraint of the system vibration amplitude. The vibration reduction control effect was good.