There has been an increasing interest in biological assays using magnetic nanoparticles coated with bio-molecule markers, such as antibodies or antigens. A new technique based on detection of Brownian relaxation time of magnetic nanoparticles has been developed that has several orders higher sensitivity as compared with enzyme-linked immunosorbent assay (ELISA). There is also a parallel development within the biotechnology area where the magnetic nanoparticles have been refined and specialized for specific tasks both for biological assays, hyperthermia, and for targeted drugs delivery. Microelectromechanical systems (MEMS) are being developed into lab-on-a-chip, containing microfluidic systems simplifying the transport, handling and analysis of the reagents under investigation. In this lecture, basic principles of magnetic bioassays will be discussed in view of potential applications in bio-diagnostics.