An ER shock absorber with mixed mode is designed and its mathematical model is built. The optimal control method with LQ is applied to semi-active suspension systems in vehicle. A optimal output tuner is designed on basis of 1/4 dynamic model and the characteristics of the ER shock absorber. Its aim function and the weighting parameter matrix are determined. The feedback gain vector is found from solving the Algebraic Equation. The result shows that the optimal controller could not only diminish the body acceleration effectively but also improve the ride and handling characteristics. The construction of the ER shock absorber is reasonable and its performance meets the optimal control requirements of semi-active suspension system under the 3 kV/mm. In additional, the optimal control has low cost and energy consumption as well as rapid response . Such a system can meet with the requirements of semi-active suspension control completely.