Vacancies can induce local magnetic moments in graphene, paving the way to make magnetic functional graphene. Due to the interaction between magnetic moments and conduction carriers, the magnetotransport properties of graphene can be modulated. Here, the effects of vacancy induced magnetic moments on the electrical properties of graphene are studied via magnetotransport measurements and spin-polarized density functional theory calculations. We show by quantum Hall measurements that a sharp resonant Vπ state is introduced in the midgap region of graphene with vacancies, resulting in the local magnetic moment. The coupling between the localized Vπ state and the itinerant carrier is tuned by varying the carrier concentration, temperature, magnetic field, and vacancy density, which results in a transition between hopping transport and the Kondo effect and a transition between giant negative magnetoresistance (MR) and positive MR. This modulated magnetotransport is valuable for graphene based spintronic devices.