To solve the problem of low magnetic field utilization of conventional MR brakes, a drum MR brake with internal and external fluid flow channel was designed. By adding non-magnetic rings and non-magnetic disk to the magnetic material rotary sleeve and the stator magnetic cylinder, the magnetic flux was guided meander through six effective damping gaps in the internal and external axial flow channels. Therefore, the torque performance was improved under the premise that the outer dimension of the brake remains unchanged. The structure and working principle of the internal and external fluid flow MR brake were described, and the mathematical model of braking torque were deduced and established. Based on the analysis of electromagnetic field and torque, the accuracy of the model was predicted by theoretical calculation and DOE experiment orthogonal method, and the multi-objective optimization of the MR brake with internal and external fluid flow channel was carried out by using the NSGA-Ⅱ algorithm. The results show that, with an applied current of 2.0 A, the braking torque of the initial and optimal MR dampers are 36.38N.m and 47.35N.m, respectively, with dynamic adjustable ranges of 18.28 and 21.31, respectively. Compared with the initial damper, the braking torque increased by 21.31%, and the dynamic adjustable range increased by 16.58.