Acoustofluidics, the integration of acoustics and microfluidics, is a rapidly growing research field that is addressing challenges in biology, medicine, chemistry, engineering, and physics. In particular, acoustofluidic separation of biological targets from complex fluids has proven to be a powerful tool due to the label-free, biocompatible, and contact-free nature of the technology. By carefully designing and tuning the applied acoustic field, cells and other bioparticles can be isolated with high yield, purity, and biocompatibility. Recent advances in acoustofluidics, such as the development of automated, point-of-care devices for isolating sub-micron bioparticles, address many of the limitations of conventional separation tools. More importantly, advances in the research lab are quickly being adopted to solve clinical problems. In this review article, we discuss working principles of acoustofluidic separation, compare different approaches of acoustofluidic separation, and provide a synopsis of how it is being applied in both traditional applications, such as blood component separation, cell washing, and fluorescence activated cell sorting, as well as emerging applications, including circulating tumor cell and exosome isolation.