A microfluidic device operates as a pump for pumping fluid along a channel in a microchip by moving a drive fluid in the channel under the influence of a force field that is generated externally to the channel. The drive fluid is preferably a ferrofluid, and the force field is preferably a variable magnetic field. Drive fluid, driven by variation of the magnetic field, drives driven fluid through the channel. The drive fluid is recirculated, in one case by rotating the drive fluid within an enlargement in the channel, and in another case by returning the drive fluid along a return channel. A valve is formed by using a ferrofluid plug as a movable barrier for fluids in a channel. The microfluid device may be formed between two plates forming a microchip. The channels may be as small as 1 .mu.m to 100 .mu.m. Methods of pumping fluids by using an in channel drive fluid and exterior drive are also disclosed.