The culture of anchorage dependent mammalian cells on microcarrier offers an attractive avenue for achieving high productivity of therapeutic and diagnostic proteins in bioreactors. Reducing production costs require high cell density that is accompanied by mass transfer limitations of nutrients and oxygen. High agitations required to overcome these limitations can cause considerable cell damage. In this work a novel magnetically stabilized fluidized bed (MSFB) bioreactor is developed to culture mammalian cells on microcarriers. A fluid mechanical study of the MSFB, using a laser light transmission technique showed that the local particle motion is reduced by increasing the applied magnetic field strength. This low turbulent behavior of particles in a MSFB allows for potential cultivation of cells in a three dimensional manner. Two types of magnetically susceptible microcarriers are developed for culturing cells in a MSFB. The performance of the MSFB and an ordinary fluidized bed is compared in terms of cell density, growth rate and death rate of baby hamster kidney (BHK-21) cells. Very high cell densities (5×10\sp7 cells/ml) are obtained in both the modes of operation. Results indicate that cells grow at a faster rate in a MSFB as compared to an ordinary fluidized bed. To delineate the effects of flow and magnetic field on cell proliferation, BHK cells were cultured on nonmagnetically susceptible microcarriers in the presence and absence of a 80 gauss DC magnetic field. Five pairs of experiments showed that a uniform static magnetic field increased the growth of BHK-21 cells in a fluidized bed environment. The reduced local motion of particles and the high cell densities that can be attained in a MSFB makes it suitable as a 3-D cell culture system. Preliminary experiments showed the formation of 3-D cell aggregates when hepatoma cells were cultured to high cell densities in the MSFB. A linear stability analysis of the equations of motion describing a fluidized bed predicted that the stability of the state of uniform fluidization could be enhanced by applying a nonuniform magnetic field.