In this study, a folded substrate integrated waveguide (FSIW) re-entrant cavity sensor (RECS) is proposed for full characterization of magnetic-dielectric powder materials. In the re-entrant cavity, the electric field (E-field) and magnetic field (H-field) are localized at two different regions for detecting complex permittivity and complex permeability independently. Due to the extremely weak H-field in the high-intensity E-field region of the re-entrant cavity, the impact of the high magnetic loss of magneto-dielectric (MD) materials on the permittivity measurement is ignored, which simplifies the algorithm for extracting the complex permittivity. The simulated results demonstrate a good electromagnetic separation performance of the FSIW RECS, characterized by the very low cross-sensitivity-ratios ${S}_{\textit {fm}2}{/}{S}_{\textit {fe}}$ of 0.0289 and ${S}_{\textit {Qm}2}{/}{S}_{\textit {Qe}}$ of 0.0035. Folding technology is used to enhance the sensitivity for extracting the complex permittivity and realize the miniaturization of the designed sensor. To accurately characterize the MD materials with the high magnetic loss tangent up to 0.7, the weak-coupling feeding method is employed to improve the Q-factor of this sensor, and magnetic loss tangent is taken into account in the extraction of the real part of the permeability. The prototype of the FSIW RECS was fabricated and experimentally verified by measuring the complex permittivity and permeability of several powder materials. The measured relative permittivity and permeability of powder samples are in good agreement with the referred ones, and the corresponding maximum relative errors are 3.79% and 4.44%, respectively.