Magnetic particles are widely used as signal labels in a variety of biological sensing applications, such as molecular detection and related strategies that rely on ligand-receptor binding. In this review, we explore the fundamental concepts involved in designing magnetic particles for biosensing applications and the techniques used to detect them. First, we briefly describe the magnetic properties that are important for bio-sensing applications and highlight the associated key parameters (such as the starting materials, size, functionalization methods, and bio-conjugation strategies). Subsequently, we focus on magnetic sensing applications that utilize several types of magnetic detection techniques: spintronic sensors, nuclear magnetic resonance (NMR) sensors, superconducting quantum interference devices (SQUIDs), sensors based on the atomic magnetometer (AM), and others. From the studies reported, we note that the size of the MPs is one of the most important factors in choosing a sensing technique.