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In environmental magnetism, rock and mineral magnetic techniques are used to investigate the formation, transportation, deposition, and postdepositional alterations of magnetic minerals under the influences of a wide range of environmental processes. All materials respond in some way to an applied magnetic field, and iron‐bearing minerals are sensitive to a range of environmental processes, which makes magnetic measurements extremely useful for detecting signals associated with environmental processes. Environmental magnetism has grown considerably since the mid 1970s and now contributes to research in the geosciences and in branches of physics, chemistry, and biology and environmental science, including research on climate change, pollution, iron biomineralization, and depositional and diagenetic processes in sediments to name a few applications. Magnetic parameters are used to routinely scan sediments, but interpretation is often difficult and requires understanding of the underlying physics and chemistry. Thorough examination of magnetic properties and of the environmental processes that give rise to the measured magnetic signal is needed to avoid ambiguities, complexities, and limitations to interpretations. In this review, we evaluate environmental magnetic parameters based on theory and empirical results. We describe how ambiguities can be resolved by use of combined techniques and demonstrate the power of environmental magnetism in enabling quantitative environmental interpretations. We also review recent developments that demonstrate the mutual benefit of environmental magnetism from close collaborations with biology, chemistry, and physics. Finally, we discuss directions in which environmental magnetism is likely to develop in the future.