In the present paper, the dynamic behaviour of electrorheological (ER) "Smart" journal bearing is analyzed by a finite element method used for bilinear rheological fluids. It first gives the curves of the eight dynamic coefficients versus the applied electric voltage across the oil film of journal bearing. Furthermore, the rotation stability of the ER journal rotor system is studied. It is found that increasing the voltage (electric field) across the oil film can improve the system stability.