Magnetic Digital microfluidics (DMF), which enables the manipulation of droplets containing different types of samples and reagents by permanent magnets or electromagnet arrays, has been used as a promising platform technology for bioanalytical and preparative assays. This is due to its unique advantages such as simple and “power free” operation, easy assembly, great compatibility with auto control systems, and dual functionality of magnetic particles (actuation and target attachment). Over the past decades, magnetic DMF technique has gained a widespread attention in many fields such as sample‐to‐answer molecular diagnostics, immunoassays, cell assays, on‐demand chemical synthesis, and single‐cell manipulation. In the first part of this review, we summarised features of magnetic DMF. Then, we introduced the actuation mechanisms and fabrication of magnetic DMF. Furthermore, we discussed five main applications of magnetic DMF, namely drug screening, protein assays, polymerase chain reaction (PCR), cell manipulation, and chemical analysis and synthesis. In the last part of the review, current challenges and limitations with magnetic DMF technique were discussed, such as biocompatibility, automation of microdroplet control systems, and microdroplet evaporation, with an eye on towards future development.