Methods are presented for creating biocompatible composites with magnetic functionality by incorporating magnetic nanoparticles in a biodegradable polymer matrix. A wide range of volume fractions for magnetic particle loading and therefore magnetization density are achievable. The nanoscale of the particles aids in achieving dispersion, so that variations in physical and chemical properties occur on scales much less than that of cells. Sufficient magnetization is achieved to enable actuation of the material, i.e., the generation of strains of biologically significant magnitudes using remotely applied magnetic fields. The magnitude of the actuation is demonstrated to enable fluid pumping and create local strains in cell aggregates that should be sufficient to stimulate cell growth and differentiation. The composite materials can be formed into random-pore scaffold materials with controlled porosity, pore shape, and pore connectivity. They can also be shaped by pressing, rolling, or drawing and joined by thermoplastic welding, so that ordered three-dimensional scaffold structures and various shell structures, such as tubes and toroids, can be fabricated. When the composite sheets are formed into tubes, the application of a moving magnetic field induces simulated peristalsis. When intestinal cells were seeded on the composite sheets, cells remained viable and grew rapidly in vitro.