We describe a simple, low-cost laboratory session to demonstrate the Fahraeus-Lindqvist effect, a microphase flow phenomenon that occurs in small blood vessels and alters the effective rheological properties of blood. The experiments are performed by flowing cells through microchannels fabricated by soft lithography and characterization of cell density, flow rate, and effective viscosity as functions of the microchannel hydraulic diameter. The experiments demonstrate the Fahraeus-Lindqvist phenomenon effectively and provide students with hands-on experience with microfluidics. Students agreed that the laboratory exercise reinforced lecture material. They also provided helpful suggestions to enhance laboratory logistics.