This paper presents a novel simple micromixer based on stable water suspensions of magnetic nanoparticles (i.e. ferrofluids). The micromixer chip is built using standard microfabrication and simple soft lithography, and the design can be incorporated as a subsystem into any chemical microreactor or a miniaturized biological sensor. An electromagnet driven by an AC power source is used to induce transient interactive flows between a ferrofluid and Rhodamine B. The alternative magnetic field causes the ferrofluid to expand significantly and uniformly toward Rhodamine B, associated with a great number of extremely fine fingering structures on the interface in the upstream and downstream regions of the microchannel. These pronounced fingering patterns, which have not been observed by other active mixing methods utilizing only magnetic force, increase the mixing interfacial length dramatically. Along with the dominant diffusion effects occurring around the circumferential regions of the fine finger structures, the mixing efficiency increases significantly. The miscible fingering instabilities are observed and applied in the microfluidics for the first time. This work is carried with a view to developing functionalized ferrofluids that can be used as sensitive pathogen detectors and the present experimental results demonstrate that the proposed micromixer has excellent mixing capabilities. The mixing efficiency can be as high as 95% within 2.0 s and a distance of 3.0 mm from the inlet of the mixing channel, when the applied peak magnetic field is higher than 29.2 Oe and frequency ranges from 45 to 300 Hz.