Magnetorheological (MR) valve is a kind of smart control mechanism that using magnetorheologcial fluid as the working fluid. A compact hybrid fluid flow MR valve was developed and prototyped, the fluid flow paths of the proposed MR valve were consisted of a single annular flow channel, a single radial flow channel and an orifice flow channel through structural design. In order to investigate the changes of the magnetic flux density and yield stress along the fluid flow paths under the four different radial resistance gaps, the magnetic circuit design and finite element analysis were carried out. The simulation results showed that this design methodology can provide a larger pressure drop of 3342kPa at 0.5mm radial resistance gap and 1.0mm annular resistance gap, which constrained in a volume space of MR valve with an outer diameter of 62mm and overall length of 80mm. Meanwhile, the experimental pressure drop under the four different radial resistance gaps was also carried out on the test rig. The results showed that the pressure drop was increased as the applied current increased, and the pressure drop also increased as the radial resistance gap decreased from 1.5mm to 0.5mm, the maximum pressure drop was approximately 2650kPa at the applied current of 1.2A when the radial resistance gap was 0.5mm, which was well accorded with the simulation results. This proposed MR valve significantly improved its efficiency through compact design and changeable radial resistance gap, which is beneficial to control the MR damper as a bypass control valve for its good pressure regulating capability.