A magnetic fastener and wall covering system include at least one wall panel having a front facing surface, a magnetically attractive rear facing surface and a side surface forming any number of different shapes. A plurality of wall fasteners and wall anchors are provided to penetrate and engage a wall. A plurality of magnetic spacers are provided having a central aperture for receiving one of the plurality of wall fasteners, and for attracting to the magnetically attractive rear surface of the wall panel. The system also includes one or more wall strips having a magnetic top surface and an adhesive back surface.