The rapid and sensitive detection of molecular targets such as proteins, cells, and pathogens in biological specimens is a major focus of ongoing medical research, as it could promote early disease diagnoses and the development of tailored therapeutic strategies. Magnetic nanoparticles (MNP) are attractive candidates for molecular biosensing applications because most biological samples exhibit negligible magnetic susceptibility, and thus the background against which measurements are made is extremely low. Numerous magnetic detection methods exist, but sensing based on magnetic resonance effects has successfully been developed into a general detection platform termed diagnostic magnetic resonance (DMR). DMR technology encompasses numerous assay configurations and sensing principles, and to date magnetic nanoparticle biosensors have been designed to detect a wide range of targets including DNA/mRNA, proteins, enzymes, drugs, pathogens, and tumor cells with exquisite sensitivity. The core principle behind DMR is the use of MNP as proximity sensors that modulate the transverse relaxation time of neighboring water molecules. This signal can be quantified using MR imagers or NMR relaxometers, including miniaturized NMR detector chips that are capable of performing highly sensitive measurements on microliter sample volumes and in a multiplexed format. The speed, sensitivity, and simplicity of the DMR principle, coupled with further advances in NMR biosensor technology should provide a high-throughput, low-cost, and portable platform for large-scale parallel sensing in clinical and point-of-care settings.