We present a simple microfluidic platform that uses biocompatible ferrofluids for the controlled manipulation and rapid separation of both microparticles and live cells. This low-cost platform exploits differences in particle size, shape, and elasticity to achieve rapid and efficient separation. Using microspheres, we demonstrate size-based separation with 99% separation efficiency and sub-10-microm resolution in <45 s. We also show continuous manipulation and shape-based separation of live red blood cells from sickle cells and bacteria. These initial demonstrations reveal the potential of ferromicrofluidics in significantly reducing incubation times and increasing diagnostic sensitivity in cellular assays through rapid separation and delivery of target cells to sensor arrays.