Ferrofluids are a special category of smart nanomaterials which shows normal liquid behavior coupled with superparamagnetic properties. One of the earliest and most prospective applications of ferrofluids is in damping, which has prominent advantages compared with conventional damping devices: simplicity, flexibility and reliability. This paper presents the basic principles that play a major role in the design of ferrofluid damping devices. The characteristics of typical ferrofluid damping devices including dampers, vibration isolators, and dynamic vibration absorbers are compared and summarized, and then recent progress of vibration energy harvesters based on ferrofluid is briefly described. Additionally, we proposed a novel ferrofluid dynamic vibration absorber in this paper, and its damping efficiency was verified with experiments. In the end, the critical problems and research directions of the ferrofluid damping technology in the future are raised.