Microfluidic cell separation based on negative magnetophoresis in ferrofluids (ferrohydrodynamics) has unique advantages over other competing techniques. Magnetic force does not interact directly with cells, minimizing potential detrimental effects on them. Systems based on negative magnetophoresis are simple and low-cost, only requiring microchannels and permanent magnets or electromagnetic coils. As a result, negative magnetophoresis has been used to manipulate particles and cells. Negative magnetophoresis also eliminates the labeling steps through the incorporation of a special medium into the assay. This medium, typically magnetic liquids such as a paramagnetic salt solution or a ferrofluid, possesses a larger magnetization than the cells. An external magnetic field attracts the magnetic medium, which causes the cells to be preferentially pushed away. Consequently, cells can be manipulated magnetically without the need for labeling them. A water-based biocompatible ferrofluid that not only maintains its colloidal stability under strong magnetic fields but also keeps cells alive was developed for cell separation. Ferrohydrodynamic cell separation in this biocompatible ferrofluids offered moderate throughput (~106 cells h-1 in this study) and extremely high separation efficiency (>99%) for HeLa and blood cells without the use of labels. A microfluidic device was further designed and optimized specifically to shorten the time of live cells' exposure to ferrofluids from hours to seconds, by eliminating time-consuming off-chip sample preparation and extraction steps and integrating them on-chip to achieve a one-step process. As a proof-of-concept demonstration, a ferrofluid with 0.26% volume fraction was used in this microfluidic device to separate spiked cancer cells from cell lines at a concentration of?100 cells per mL from white blood cells with a throughput of 1.2 mL h-1. The average separation efficiency was 82.2% and the separated cancer cells' purity was between 25.3%-28.8%. Later, we demonstrated the development of a laminar-flow microfluidic device that was capable of enriching rare circulating tumor cells from patients' blood in a biocompatible manner with a high throughput (6 mL h-1) and a high rate of recovery (92.9%). Biocompatibility study on lung and breast cancer cell lines showed that separated cancer cells had excellent short-term viability, normal proliferation and unaffected key biomarker expressions.