Magnetorheological (MR) actuators provide controlled torque through control of an applied magnetic field. Therefore knowledge of the relationship between the applied current and output torque is required. This paper presents a new nonlinear modeling of MR actuators considering magnetic hysteresis to determine the torque-current nonlinear relationship. Equations for transmitted torque are derived according to mechanical shear configurations of the MR actuator. Hodgdon's hysteresis model is used to capture the characteristics of hysteresis nonlinearity in the MR actuators. An MR actuator test setup has been constructed using a commercial MR brake to evaluate the proposed model. The measured torque shows hysteresis effects as the current increases and decreases. Using Hodgdon's hysteresis model of the magnetic circuit and Bingham model of the MR fluid, a novel nonlinear model of the MR actuator is obtained as a torque estimator for practical torque control purpose. The validity of the theoretical results is verified by comparison between experiments and simulations. Furthermore, the current versus torque frequency response of the MR actuator is examined to evaluate its applicability to torque control. The bandwidth of the MR actuator is high enough for especially haptic applications.