The ability of magnetotactic bacteria (MTB) to orient and migrate along magnetic field lines is basedon magnetosomes, which are membrane-enclosed intracellular crystals of a magnetic iron mineral. Thebiomineralization of magnetosomes is a process with genetic control over the accumulation of iron,the deposition of the magnetic crystal within a specific compartment, as well as their intracellularassembly and alignment into chain-like structures. Magnetite crystals produced by MTB have uniform species-specificmorphologies and sizes, which are mostly unknown from inorganic systems. In addition, magnetosome chainformation is an example of the highest structural level achievable in a prokaryotic cell. In thiswork, we give an overview of the biology of MTB and the structure and functions of bacterial magnetosomes.In addition we summarize the current knowledge of the physico-chemical and molecular genetic basis of magnetosomebiomineralization and chain formation.