In recent years, there has been rapidly growing interest in developing hand held, sensitive and cost-effective on-chip biosensing systems that directly translate the presence of certain bioanalytes (e.g., biomolecules, cells and viruses) into an electronic signal. The impressive and rapid progress in micro- and nanotechnology as well as in biotechnology enables the integration of a variety of analytical functions in a single chip. All necessary sample handling and analysis steps are then performed within the chip. Microfluidic systems for biomedical analysis usually consist of a set of units, which guarantees the manipulation, detection and recognition of bioanalytes in a reliable and flexible manner. Additionally, the use of magnetic fields for performing the aforementioned tasks has been steadily gaining interest. This is because magnetic fields can be well tuned and applied either externally or from a directly integrated solution in the biosensing system. In combination with these applied magnetic fields, magnetic nanoparticles are utilized. Some of the merits of magnetic nanoparticles are the possibility of manipulating them inside microfluidic channels by utilizing high gradient magnetic fields, their detection by integrated magnetic microsensors, and their flexibility due to functionalization by means of surface modification and specific binding. Their multi-functionality is what makes them ideal candidates as the active component in miniaturized on-chip biosensing systems. In this review, focus will be given to the type of biosening systems that use microfluidics in combination with magnetoresistive sensors and detect the presence of bioanalyte tagged with magnetic nanoparticles.