The aim of this paper is to develop a magnetorheological limited slip differential (MR-LSD) system, suitable for automotive applications, which has performance advantages over the conventional differential systems to improve the traction and maneuvering. The proposed differential system consists of rotating clutches submerged in MR fluid associated with an electromagnet coil. The yield stress of the MR fluid depends on the magnetic field applied by the electromagnet due to applied voltage or current. The controllable yield stress produces friction on the rotating clutches surfaces to transmit torque. The transmitted torque can be accurately controlled by varying the applied current to the electromagnet coil. Also, a theoretical investigation is demonstrated to study the dynamic performance of the MR-LSD and compared with the experimental results to validate the MR-LSD model. The comparison between the experimental and theoretical results reveals a good agreement between them and the proposed MR-LSD can improve the traction of automotive.