Magnetic fluid is a new type function material which has unique optical properties, including the thermal lens effect, magneto-optical effect, tunable refractive index and magneto-chromatic effect. Magnetic fluid provides new principle and material to the design and research of the novel photonic devices and optical fiber sensors. Wavelength-division multiplexing, optical switch, optical fiber modulator, tunable grating and filter based on the magnetic fluid are presented. Finally, the principle and structure of the optical fiber current sensors based on the magnetic fluid are analyzed.