The recent development of microfluidic "lab on a chip" devices requires the need to continuously separate submicron particles. Here, we present a PDMS microfluidic device with sidewall conducting PDMS (AgPDMS) composite electrodes capable of separating submicron particles in hydrodynamic flow. In particular, the device can service dual functions. First, the AgPDMS composite electrodes embedded in a sidewall of the device channel allow for performing AC-dielectrophoretic (DEP) characterization through direct microscopic observation of particle behavior. Characterization experiments are carried out for numerous parameters including particle size, medium conductivity, and AC field frequency to reveal important dielectrophoresis DEP information in terms of the crossover frequency and positive/negative DEP behavior under specific frequencies. Second, the device offers an advantage that sidewall AgPDMS composite electrodes can produce strong DEP effects throughout the entire channel height, and thus the robustness of the on-chip particle separation is demonstrated for continuous separation in a flowing mixture of 0.5 and 5 μm particles with 100% separation efficiency.