Ferrofluids investigated along for about five decades are ultrastable colloidal suspensions of magnetic nanoparticles, which manifest simultaneously fluid and magnetic properties. Their magnetically controllable and tunable feature proved to be from the beginning an extremely fertile ground for a wide range of engineering applications. More recently, biocompatible ferrofluids attracted huge interest and produced a considerable increase of the applicative potential in nanomedicine, biotechnology and environmental protection. This paper offers a brief overview of the most relevant early results and a comprehensive description of recent achievements in ferrofluid synthesis, advanced characterization, as well as the governing equations of ferrohydrodynamics, the most important interfacial phenomena and the flow properties. Finally, it provides an overview of recent advances in tunable and adaptive multifunctional materials derived from ferrofluids and a detailed presentation of the recent progress of applications in the field of sensors and actuators, ferrofluid-driven assembly and manipulation, droplet technology, including droplet generation and control, mechanical actuation, liquid computing and robotics.