In this paper, a method for continuous flow separation of circulating malignant cells from blood in a microfluidic device using dielectrophoresis is discussed. Separation of MDA231 breast cancer cells after mixing with normal blood cells was achieved with a level of accuracy that enabled precise counting of the malignant cells, separation and eventually, sub-culturing. MDA231 cells were separated from the blood to a daughter channel using two pairs of interdigitated activated comb-like electrode structures. All experiments are performed with conductivity adjusted medium samples. The electrode pairs were positioned divergent and convergent with respect to the flow. The AC signals used in the separation are 20 V peak-to-peak with frequencies of 10-50 kHz. The separation is based on balance of magnitude of the dielectrophoretic force and hydrodynamic force. The difference in response between circulating malignant cells and normal cells at a certain band of alternating current frequencies was used for rapid separation of cancer cells from blood. The significance of these experimental results is discussed in this paper, with detailed reporting on the suspension medium, preparation of cells, flow condition and the fabrication process of the microfluidic chip. The present technique could potentially be applied to identify incident cancer at a stage and size that is not yet detectable by standard diagnostic techniques (imaging and biochemical testing). Alternatively, it may also be used to detect cancer recurrences.