Compared to other available methods, AC dielectrophoresis is particularly well-suited for the manipulation and separation of minute particles in microfluidics. The exposure of suspended particles to a field generates not only the dielectrophoretic force acting on each of these particles, but also the dipolar interactions of the particles due to their polarization. Based on the results of our recent experimental and theoretical studies, we consider the field-driven dielectrophoresis and phase separation of suspensions at the microscale. In particular, we address the effects of confinement on the particle aggregation in suspensions subject to a spatially uniform electric field. We also demonstrate that dielectrophoresis of suspended polarizable particles can be generated by destabilizing a flat interface between two immiscible fluids with a spatially uniform electric field.