The idea of Magnetix is to build different shapes and designs with small plastic pieces -- bound together by tiny, powerful magnets.
The box boasts "mega-magnetic power" and warns of a choking hazard to small children.
Penny Sweet's 2-year-old son, Kenny, died Thanksgiving Day after swallowing tiny magnets from the toy -- but he didn't choke.
"The fact that he's gone is just," Sweet said. "It's so difficult to sleep at night and wake up in the morning, and go through the day without him."
An autopsy found two tiny magnets stuck in Kenny's small intestine. Doctors say the magnets were so strong that they joined two ends of his small intestine, pinching it shut. As a result, bacteria were forced into his bloodstream -- killing him.
The magnets are so strong they're hard to pull apart -- but they are supposed to be encased in plastic pieces. The little pieces are not supposed to be loose, and came out of the larger pieces.
Sweet said the toy was defective because the tiny magnets easily came loose.
Other parents are now reporting close calls with the same problem -- including a 5-year-old hospitalized in Seattle.
The cases led to an extraordinary news conference from leading health officials warning parents about the toy.
"Don't let small children play with the toys," said Dr. Richard Harruff, a King County medical examiner. "And supervise any child playing with the toy."
Dr. Daniel Leadbetter saved one boy's life after performing emergency surgery and finding the magnets caught in an intestine.
"We found he had some holes in his intestine leaking out bacteria," said Leadbetter of the Seattle Children's Hospital.
In a statement to ABC News, the toy's manufacturer points out that Magnetix has passed all federal safety requirements and that the box features prominent small part hazard warnings.
The manufacturer adds that prior to the Seattle incident, "we have no record or knowledge of a similar occurrence."
Even so, the Consumer Product Safety Commission is calling it a "priority case" and says it is in the midst of a serious investigation.
Sweet says she plans to hold the company accountable.
"This toy has to be recalled," she said. " It's defective."