A series of Fe flake-based MR fluids were prepared using a ferrofluid as a dispersion medium. The concentration of micron-size particles was kept constant, and the nanoparticle concentration was varied. The MR fluids were characterised structurally and rheologically. The experimental results were fitted with various models. This paper aims to elucidate how the frictional behaviour of the flakes is modified in the presence of magnetic nanoparticles. The measurements were carried out on fluid flow under different conditions, such as applied magnetic field, shear rate, and stress. The data was analysed using the recent PUP (Pisuwala-Upadhyay-Parekh) rheology model. The results clearly show that the friction between the anisotropic particles decreases with an increase in nanoparticle concentration. The conclusion is further enforced by testing a commercial MRF with spherical particles.