Highly sensitive, efficient, and high-throughput biosensors are required for genomic and proteomic data acquisition in complex biological samples and potentially for in vivo applications. To facilitate these studies, we have developed biocompatible magnetic nanosensors that act as magnetic relaxation switches (MRS) to detect molecular interactions in the reversible self-assembly of disperse magnetic particles into stable nanoassemblies. Using four different types of molecular interactions (DNA-DNA, protein-protein, protein-small molecule, and enzyme reactions) as model systems, we show that the MRS technology can be used to detect these interactions with high efficiency and sensitivity using magnetic relaxation measurements including magnetic resonance imaging (MRI). Furthermore, the magnetic changes are detectable in turbid media and in whole-cell lysates without protein purification. The developed magnetic nanosensors can be used in a variety of biological applications such as in homogeneous assays, as reagents in miniaturized microfluidic systems, as affinity ligands for rapid and high-throughput magnetic readouts of arrays, as probes for magnetic force microscopy, and potentially for in vivo imaging.