A microbial biosensor consists of a transducer in conjunction with immobilised viable or non-viable microbial cells. Non-viable cells obtained after permeabilisation or whole cells containing periplasmic enzymes have mostly been used as an economical substitute for enzymes. Viable cells make use of the respiratory and metabolic functions of the cell, the analyte to be monitored being either a substrate or an inhibitor of these processes. Bioluminescence-based microbial biosensors have also been developed using genetically engineered microorganisms constructed by fusing the lux gene with an inducible gene promoter for toxicity and bioavailability testing. In this review, some of the recent trends in microbial biosensors with reference to the advantages and limitations are been discussed. Some of the recent applications of microbial biosensors in environmental monitoring and for use in food, fermentation and allied fields have been reviewed. Prospective future microbial biosensor designs have also been identified.