This study proposes a new smart base isolation system that employs Magneto-Rheological Elastomers (MREs), a class of smart materials whose elastic modulus or stiffness can be varied depending on the magnitude of an applied magnetic field. It also evaluates the dynamic performance of the MRE-based isolation system in reducing vibrations in structures subject to various seismic excitations. As controllable stiffness elements, MREs can increase the dynamic control bandwidth of the isolation system, improving its vibration reduction capability. To study the effectiveness of the MRE-based isolation system, this paper compares its dynamic performance in reducing vibration responses of a base-isolated single-story structure (i.e., 2DOF) with that of a conventional base-isolation system. Moreover, two control algorithms (linear quadratic regulator (LQR)-based control and state-switched control) are considered for regulating the stiffness of MREs. The simulation results show that the MRE-based isolation system outperformed the conventional system in suppressing the maximum base drift, acceleration, and displacement of the structure.