Magnetosomes are specialized organelles for magnetic navigation that comprise membrane-enveloped, nano-sized crystals of a magnetic iron mineral; they are formed by a diverse group of magnetotactic bacteria (MTB). The synthesis of magnetosomes involves strict genetic control over intracellular differentiation, biomineralization, and their assembly into highly ordered chains. Physicochemical control over biomineralization is achieved by compartmentalization within vesicles of the magnetosome membrane, which is a phospholipid bilayer associated with a specific set of proteins that have known or suspected functions in vesicle formation, iron transport, control of crystallization, and arrangement of magnetite particles. Magnetosome formation is genetically complex, and relevant genes are predominantly located in several operons within a conserved genomic magnetosome island that has been likely transferred horizontally and subsequently adapted between diverse MTB during evolution. This review summarizes the recent progress in our understanding of magnetobacterial cell biology, genomics, and the genetic control of magnetosome formation and magnetotaxis.