This article reviews the principles of magnetic field-directed self-assembly (MFDSA) of magnetic nanoparticles (MNPs), along with recent studies that advance the fundamental understanding and potential capabilities of MNP MFDSA. This technology could eventually find application in manufacturing novel materials and components for biomedicine, energy, optics, functional composites, and microfluidics. In MFDSA, an externally applied field drives the assembly of MNPs. Uniform fields can create complex chains of MNPs, while inhomogeneous fields (such as those created by permanent magnets) apply attractive forces to MNPs that pull them toward the region of strongest field strength. Thus, MNPs can be self-organized as well as directed into user-designed patterns by controlling the external field arrangement. Because of its biocompatibility, nanoscale resolution, and low cost, MFDSA is a highly versatile technique that could enable high volume nanomanufacturing of MNPs into complex, finished materials.