<p>One of the most intricate structures found in bacterial cells are magnetosomes of magnetotactic bacteria. These membrane-bound organelles contain tens-of-nanometre-sized crystals of a magnetic iron mineral that are usually aligned in well-ordered chains and function as sensors for geomagnetic field navigation in their aquatic habitats. Magnetosomes emerged as a model to study bacterial cell biology, organelle biogenesis and biomineralization, but they are also of interest as ‘magnetofossils’ in geoscience and have potential for various biotechnological applications. Recent work has unveiled a vast structural and genetic complexity of magnetosome biosynthesis. In this Review, we summarize current knowledge of magnetosome formation and organization within the cell, with emphasis on two established magnetospirilla model species. We highlight the function, diversity and potential applications of magnetosomes and discuss open questions for future research.</p>