Many animals are able to sense the earth’s magnetic field, including varieties of arthropods and members of all major vertebrate groups. The existence of this magnetic sense is widely accepted, and this magnetic control of cellular activity is of great interest in the development of targetable noninvasive neuromodulatory tools as well as from a basic biology perspective. However, the mechanism of action of natural magnetosensation remains unknown, forcing researchers to turn to develop synthetic approaches to stimulate cells using magnetic fields. I discuss how the magnetocaloric effect could explain the puzzling performance of recent synthetic magnetosensors, and outlines a model for natural magnetosensation based on the rotating magnetocaloric effect. These models predicts that heat generated by magnetic nanoparticles may allow proteins to respond to changes in the applied field and allow animals to detect features of the earth's magnetic field. Using these models, I identify the conditions required for the rotating magnetocaloric effect to produce detectable physiological signals in response to the earth's magnetic field, and suggest experiments to distinguish between candidate mechanisms of magnetoreception. Finally, these models also have important implications for the rational design of synthetic magnetically sensitive biological systems. Accordingly I explore the promise and requirements of the development of improved magnetosensory protein complexes and novel bio-compass systems based on principles from the magnetocaloric model of natural magnetosensation.