•The effective medium approximation is modified.•.The percolation threshold depends on the magnetic field.•A significant increase in the effective elastic moduli is feasible.•The existence of a magnetic Poisson effect is proposed. Composite materials where magnetic micrometer-sized particles are embedded into a compliant polymer matrix are known as magnetorheological (or magnetoactive) elastomers (MAEs). They are distinguished by huge variations in their physical properties, when in a magnetic field, which is commonly attributed to the restructuring of the filler. The process of the magnetic-field-induced restructuring in a magnetorheological elastomer is interpreted as progression towards percolation. Such a physical model was previously used to explain the dependence of the magnetic permeability and dielectric permittivity of MAEs on the magnetic field strength. Based on this hypothesis, the magnetorheological effect in MAEs is considered theoretically. The theoretical approach is built upon a self-consistent effective-medium theory for the elastic properties, extended to the variable (field dependent) percolation threshold. The proposed model allows one to describe the large variations (over several orders of magnitude) of the effective elastic moduli of these composite materials, known as the giant magnetorheological (MR) and field-stiffening effects. The existence of a giant magnetic Poisson effect is predicted. The relation of the proposed model to the existing theories of the MR effect in MAEs is discussed. The results can be useful for applications of MAEs in magnetic-field-controlled vibration dampers and isolators.