An assessment of the suitability of ferrofluids for acoustic transducer and receiver applications has led to the following conclusions:First, the magnetostrictive mode of operation is not efficient enough to offer an alternative to conventional solid materials in use.Second, the piston motion of the ferrofluid induced by an applied field gradient does provide a real alternative to conventional magnetostrictive transducers. For an applied static field of 4000 Oe and a field gradient of 1000 Oe/cm, it is possible to achieve an overall efficiency that is greater than that for the ferromagnetic solids.Third, ferrofluids appear to provide a desirable alternative for pressure‐sensing applications in severe environments (e.g., detonations) where piezoelectric and pyroelectric materials suffer fatigue and failure.Fourth, ferrofluids offer the prospect of obtaining broadband frequency response when radiating or receiving in liquid media.