Engineered ‘smart' fluids, called ferrofluids, which permit static and dynamic control by external magnetic fields of low or moderate strengths present a novel and challenging domain for scientists and technologists. The introduction of a ‘controllable' or ‘tunable' external force into the momentum transport equations opens up new fields of physical phenomena. In situations where the external field influence becomes strong enough to compete with gravitational forces or acts as a sole external agency to drive flows in the hypo-gravity environment, a new class of hydrodynamic phenomena becomes accessible. Ferrofluids exhibit special rheological properties that make them suited for a number of technological and biomedical applications. This chapter outlines the underlying physics of field-fluid interactions on one hand; on the other, it cites novel techniques in ferrofluid-actuated electronics cooling, hydrostatic & hydrodynamic bearings, extreme-boundary lubrication, damping systems, biomimetic locomotion, and medical diagnostics (e.g. magnetic drug targeting & magnetic cell sorting).