This paper describes the development of a novel compact magneto-rheological (MR) fluid brake with high transmitted torque and a simple structure. The MR fluid brake has two shearing disks with an electromagnetic coil located between them. Such a structure enables the brake to have a small radial dimension and a large torque transmission capacity. In the design process, a Bingham viscoplastic model is used to predict the transmitted torque. Electromagnetic finite element analysis (FEA) is performed to assist the magnetic circuit design and structural parameters' optimization. The novel brake design is prototyped and studied. Experimental results show that a compact MR fluid brake with high transmitted torque is successfully achieved.