Magnetic nanoparticles (MNPs) have garnered significant attention in biomedical applications. Due to their large surface area and tunable properties, MNPs are used in microfluidic systems, which allow for the manipulation and control of fluids at micro- or nanoscale. Using microfluidic systems allows for a faster, less expensive, and more efficient approach to applications like bioanalysis. MNPs in microfluidics can precisely identify and detect bioanalytes on a single chip by controlling analytes in conjunction with magnetic particles (MPs) and separating various particles for analytical functions at the micro- and nanoscales. Numerous uses for these instruments, including cell-based research, proteomics, and diagnostics, have been reported. The successful reduction in the size of analytical assays and the creation of compact LOC platforms have been made possible with the assistance of microfluidics. Microfluidics is a highly effective method for manipulating fluids as a continuous flow or discrete droplets. Since the implementation of the LOC technology, various microfluidic methods have been developed to improve the efficiency and precision of sorting, separating, or isolating cells or microparticles from their original samples. These techniques aim to surpass traditional laboratory procedures. This review focuses on the recent progress in utilizing microfluidic systems that incorporate MNPs for biological applications.