The absence of strong buoyancy forces severely complicates the management of multiphase flows in microgravity. Different types of space systems, ranging from in-space propulsion to life support, are negatively impacted by this effect. Multiple approaches have been developed to achieve phase separation in microgravity, whereas they usually lack the robustness, efficiency, or stability that is desirable in most applications. Complementary to existing methods, the use of magnetic polarization has been recently proposed to passively induce phase separation in electrolytic cells and other two-phase flow devices. This article illustrates the dia- and paramagnetic phase separation mechanism on MilliQ water, an aqueous MnSO4 solution, lysogeny broth, and olive oil using air bubbles in a series of drop tower experiments. Expressions for the magnetic terminal bubble velocity are derived and validated and several wall–bubble and multi-bubble magnetic interactions are reported. Ultimately, the analysis demonstrates the feasibility of the dia- and paramagnetic phase separation approach, providing a key advancement for the development of future space systems.