Magnetic flywheel system utilizes a magnetic bearing, which is able to support the shaft without mechanical contacts, and also it is able to control rotational vibration. Magnetic flywheel system is composed of position sensors, a digital controller, actuating amplifiers, an electromagnet and a flywheel. This work applies the neuro-fuzzy control algorithm to control the vibration of a magnetic flywheel system. It proposes the design skill of an optimal controller when the system has structured uncertainty and unstructured uncertainty, i.e. it has a difficulty in extracting the exact mathematical model. Inhibitory action of vibration was verified at the specified rotating speed. Unbalance response, a serious problem in rotating machinery, is improved by using a magnetic bearing with neuro-fuzzy algorithm.