Stimuli‐responsive polymers have received increasing attention for various applications due to their ability to adapt physical and chemical properties in response to external environmental stimuli. In this regard, poly(N‐isopropylacrylamide) (PNIPAM) is the most extensively studied stimuli‐responsive polymer and, consequently has been prominently featured in (bio)‐sensor development, adaptive coating technology, drug delivery, wound healing, tissue regeneration, artificial actuator design, sensor technology, responsive coatings, and soft robotics. This success can be mainly attributed to the accessible and versatile nature of the PNIPAM platform, thus allowing the synthesis of a wide variety of copolymer architectures, topologies and compositions. Within this review, the structural and compositional features of PNIPAM‐based materials in sensor and biosensor applications are discussed with a focus on the literature from 2016 until now. The reader is provided with the current state of the art regarding PNIPAM‐based sensor development and their molecular design. Finally, the challenges ahead in the successful implementation of PNIPAM‐based sensors are highlighted, as well as the opportunities in the rational design of improved PNIPAM‐based sensors. Altogether, this review provides comprehensive insights into the exciting and rapidly expanding field of PNIPAM‐based sensing systems, which will benefit the chemical, pharmaceutical, textile, and biotech industries is believed.