<p>Ferrofluids are colloidal suspensions of magnetic nanoparticles that have an extensive range of applications in both engineering and the biomedical field. Ferrofluids have different methods of synthesis based on the application. A brief overview of the synthesis of ferrofluids and their applications has been discussed. The review explores the fundamental principles governing the ferrofluid dynamics. The biomedical applications, such as magnetic drug targeting, magnetic hyperthermia, MRI (magnetic resonance imaging), MPI (magnetic particle imaging), and biosensors, are addressed in this paper. The examination of ferrofluids for various biomedical applications led to theoretical and experimental investigations. The theoretical and experimental results determining the parameters, such as magnetic nanoparticles size, temperature, magnetic field, and biocompatibility affecting ferrofluid applications, are reviewed. While offering promising in vitro and computational data, clinical validation gaps remain significant, especially in the optimisation of parameters such as specific absorption rate (SAR) and intrinsic loss power (ILP). This review also identifies the possible integration of MPI with MFH towards precise treatment and offers a comparative evaluation of recent theoretical, numerical, and experimental models. Overall, the review provides a multidisciplinary platform for the simulation and design of ferrofluids in biomedical systems and outlines the path towards more clinically translatable and cost-effective nanoparticle-based therapies.</p>