Computer simulations were used to investigate the performance of a microscale ferrofluid-based magnetic actuator developed for liquid dispensing in microfluidic channels. The actuation was based on the movement of a ferrofluid plug in a magnetic field gradient generated by on-chip effectively infinite parallel conductors. The movement, positioning, and retaining of ferrofluid plugs with different lengths at various locations along a microfluidic channel were investigated for two cases. In case (a), the magnetic field gradient was generated by a single conductor; when the ferrofluid reached its equilibrium position, the current was switched off and the nearest neighbor conductor was energized. A similar, consecutive on/off current switching was performed for case (b), where a set of conductors was energized simultaneously.