Phase separation is a common occurrence in nature. Synthetic and natural polymers, salts, ionic liquids, surfactants, and biomacromolecules phase separate in water, resulting in an aqueous two-phase system (ATPS). This review discusses the properties, handling, and uses of ATPSs. These systems have been used for protein, nucleic acid, virus, and cell purification and have in recent years found new uses for small organics, polysaccharides, extracellular vesicles, and biopharmaceuticals. Analytical biochemistry applications such as quantifying protein-protein binding, probing for conformational changes, or monitoring enzyme activity have been performed with ATPSs. Not only are ATPSs biocompatible, they also retain their properties at the microscale, enabling miniaturization experiments such as droplet microfluidics, bacterial quorum sensing, multiplexed and point-of-care immunoassays, and cell patterning. ATPSs include coacervates and may find wider interest in the context of intracellular phase separation and origin of life. Recent advances in fundamental understanding and in commercial application are also considered. Expected final online publication date for the Annual Review of Analytical Chemistry, Volume 14 is August 2021. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.