We previously described the design of triacetic acid lactone (TAL) biosensor “AraC-TAL1”, based on the AraC regulatory protein. While useful as a tool to screen for enhanced TAL biosynthesis, this variant shows elevated background (leaky) expression, poor sensitivity, and relaxed inducer specificity, including responsiveness to orsellinic acid (OA). More sensitive biosensors specific to either TAL or OA can aid in the study and engineering of polyketide synthases that produce these and similar compounds. In this work, we employed a TetA-based dual-selection to isolate new TAL-responsive AraC variants showing reduced background expression and improved TAL sensitivity. To improve TAL specificity, OA was included as a “decoy” ligand during negative selection, resulting in isolation of a TAL biosensor that is inhibited by OA. Finally, to engineer OA-specific AraC variants, the IPRO computational framework was employed, followed by two rounds of directed evolution, resulting in a biosensor with 24-fold improved OA/TAL specificity, relative to AraC-TAL1.