Measurements of electrorheological (ER) effects, dielectric properties, and electrical conductivity are made on an ER suspension composed of carbonaceous particles and silicone oil to understand the mechanism which governs the ER effect. In the frequency dependence of the dielectric permittivities, a dielectric dispersion is observed in the first-order dielectric permittivity, while in the third-order dielectric permittivity a resonance peak, which is due to shear-induced particle rotation, is recognized, showing that such dielectric properties are closely related to ER properties of the suspension. An electrical conduction mechanism, which is responsible for the ER effect, is also investigated from the dependence of dc electrical conductivity on electric-field strength and temperature.