Manipulating particles and cells in magnetic liquids through so-called “negative magnetophoresis” is a new research field. It has resulted in label-free and low-cost manipulation techniques in microfluidic systems and many exciting applications. It is the goal of this review to introduce the fundamental principles of negative magnetophoresis and its recent applications in microfluidic manipulation of particles and cells. We will first discuss the theoretical background of three commonly used specificities of manipulation in magnetic liquids, which include the size, density and magnetic property of particles and cells. We will then review and compare the media used in negative magnetophoresis, which include paramagnetic salt solutions and ferrofluids. Afterwards, we will focus on reviewing existing microfluidic applications of negative magnetophoresis, including separation, focusing, trapping and concentration of particles and cells, determination of cell density, measurement of particles' magnetic susceptibility, and others. We will also examine the need for developing biocompatible magnetic liquids for live cell manipulation and analysis, and its recent progress. Finally, we will conclude this review with a brief outlook for this exciting research field.