This research focuses on developing a new configuration and optimal design of magneto-rheological (MR) brake for a middle-sized motorcycle which can replace conventional drum-type brake. The proposed MR brake mechanism utilizes a hybrid concept of magnetic circuit (using both axial and radial magnetic flux) to generate braking force. In the optimization, the required braking torque, the temperature due to zero field friction of MR fluid, the mass of the brake system and all significant geometric dimensions are considered. After a brief introduction of the proposed MR brake configuration, the braking torque is derived based on Herschel-Bulkley rheological model of the MR fluid. The optimal design of the MR brake is then analyzed. An optimization procedure based on the finite element analysis (FEA) integrated with an optimization tool is used to obtain optimal geometric dimensions of the MR brake. From the results, discussions on the performance improvement of the optimized MR brake are described.