The paper is devoted to the utilization of ferrofluid as a separating medium and modifying agent affecting the magnetic properties of solid and liquid materials. The separation tests in a MHS separator have been carried out under laboratory condition. The selectivity of ferrofluid's adsorption to the surface of some materials can be used for enhancing the magnetic susceptibility and influencing the efficiency of separation process. The enhancement of magnetic susceptibility of oil products up to a level sufficient for their magnetic extraction from water is possible by admixing of a definite amount of kerosene-based ferrofluid, which is non-miscible with water. The results point to the fact that the MHS method is suitable for the separation of non-magnetic materials according to their density and the modification of magnetic properties of materials by ferrofluid enhancing their magnetic separability.