The key element of the toy is the magnetophoretic display panel, filled with a thick, opaque white liquid containing tiny dark magnetic particles. These particles can be drawn to the drawing surface by a magnet-tipped stylus or optionally-provided shapes, or removed to the hidden back side by a sliding eraser bar. The middle layer is divided into a honeycomb of cells, keeping the liquid static and the particles evenly distributed across the panel. The liquid is formulated so that the floating particles can be pulled through it in response to the magnetic forces, but not due to gravity.

The toy was originally produced as "Magna Doodle" by Tyco until 1997, when Tyco was purchased by Mattel. Mattel then sold the toy under its Fisher-Price brand. The brand was later sold to the Ohio Art Company. Today, the "Magna Doodle" brand is owned by Cra-Z-Art. Fisher-Price have produced their own alternative called the Doodle Pro, while Ohio Art produced the similar Doodle Sketch until 2016 when it sold the brand to Spin Master. The Doodle Pro is still available in the UK from the distribution company Megatel LTD.

Because the Magna Doodle uses no ink or graphite, scuba instructors use it as an underwater whiteboard when instructing students, and divers who wish to pass short notes. The Magna Doodle is not specifically designed to work underwater and many of its components can rust or otherwise deteriorate over time.