This paper describes a miniaturized, integrated, microfluidic device that can pull molecules and living cells bound to magnetic particles from one laminar flow path to another by applying a local magnetic field gradient, and thus selectively remove them from flowing biological fluids without any wash steps. To accomplish this, a microfabricated high-gradient magnetic field concentrator (HGMC) was integrated at one side of a microfluidic channel with two inlets and outlets. When magnetic micro- or nano-particles were introduced into one flow path, they remained limited to that flow stream. In contrast, when the HGMC was magnetized, the magnetic beads were efficiently pulled from the initial flow path into the collection stream, thereby cleansing the original fluid. Using this microdevice, living E. coli bacteria bound to magnetic nanoparticles were efficiently removed from flowing solutions containing densities of red blood cells similar to that found in blood. Because this microdevice allows large numbers of beads and cells to be sorted simultaneously, has no capacity limit, and does not lose separation efficiency as particles are removed, it may be especially useful for separations from blood or other clinical samples. This on-chip HGMC-microfluidic separator technology may potentially allow cell separations to be carried out in the field outside of hospitals and clinical laboratories.