The present invention relates to a variable-torque magnetorheologically actuated prosthetic knee which utilizes a plurality of interspersed and alternating rotors and stators to shear magnetorheological fluid in gaps formed therebetween. Advantageously, by operating in the “shear mode” there is substantially no or negligible fluid pressure buildup or change. Moreover, the multiple MR fluid gaps or flux interfaces desirably allow for the production of a large torque at low speed—eliminating the need for a transmission—and also for a wide dynamic torque range. One embodiment of the invention allows the rotors and/or stators to close the gaps therebetween to create a frictional torque component, thereby forming a “hybrid” braking system which provides a total torque or damping which is a combination of viscous torque and frictional torque.