Suspensions of coated superparamagnetic particles (magnetic fluids, MF) in AC magnetic fields have a pronounced specific absorption rate (SAR) per mass compared to multidomain particles. The aim of the present study was to investigate cellular uptake and the biological effects of AC magnetic field excited bio-compatible magnetic fluids on human carcinoma cells in vitro. One of the fluids tested was a dextran magnetite, which has a very low cyto-toxicity with survival fractions (SF) between 0.8 and 0.9 at concentrations of up to 5 mg ferrite per ml. Human carcinoma cells intracellularly accumulate up to 1 pg ferrite/cell which has been demonstrated by electron microscopy (TEM), X-ray spectroscopy and measurements of intracellular iron. It has been shown that the ferrite core is not altered intracellularly, but many of the dextran shells are degraded which yields particle chains and other aggregates observed in TEM. Semi-solid pellets of the tumour cells were treated with AC magnetic fields (520 kHz, 4-12.5 kA/m) or waterbath hyperthermia at 43 and 45 degrees C, in presence of extracellular and/or intracellular magnetic fluid particles. Although MF heating is produced from individual particles, the survival fractions of MF heated and water bath heated cells are equal. In fact, the extracellular MF particle distribution is homogeneous enough to obtain similar inactivation. In contrast to earlier reports intracellular dextran magnetite particles in AC magnetic fields did not induce cell inactivation. Since the amount of intracellular ferrite should be indeed large enough for cell inactivation, the loss of dextran shells is most probably the main cause of limited effectiveness of the intracellular magnetite particles. The present work has demonstrated that: (1) MFH is able to inactivate tumour cells in vitro to at least the same extent as water bath hyperthermia; and (2) that there is a sensitizer effect of ferrofluids at 43 degrees C probably caused by free ferric ions which induce oxidative stress; and (3) that there is no cytotoxic effect of intracellular dextran magnetite particles 30-180 min excited with AC magnetic fields used in this study. For the new method the term 'magnetic fluid hyperthermia (MFH)' is proposed.