A novel alternating current-dielectrophoresis microfluidic chip was developed to separate particles and cells continuously by their electric properties. The flow is induced by pressure gradient. A pair of simple, 3-D electrodes was used to achieve a localized nonuniform electric field. Dielectrophoretic force is generated in the transverse direction to the flow by inserting the electrodes along the channel side walls. The localized electric field is important to reduce the Joule heating and any adverse effects of electrical field on biological cells. Latex particles of different sizes and white blood cells (8-12 mu m) were manipulated successfully and the separation of 10 mu m latex particles and white blood cells based on their different electrical properties was demonstrated.