A microbial biosensor is an analytical device that couples microorganisms with a transducer to enable rapid, accurate and sensitive detection of target analytes in fields as diverse as medicine, environmental monitoring, defense, food processing and safety. The earlier microbial biosensors used the respiratory and metabolic functions of the microorganisms to detect a substance that is either a substrate or an inhibitor of these processes. Recently, genetically engineered microorganisms based on fusing of the lux, gfp or lacZ gene reporters to an inducible gene promoter have been widely applied to assay toxicity and bioavailability. This paper reviews the recent trends in the development and application of microbial biosensors. Current advances and prospective future direction in developing microbial biosensor have also been discussed.