A microbial biosensor is an elaborate analytic device that uses microorganisms as recognition elements, mainly for application in environmental monitoring, food safety, military defense, and medicine. The selection and immobilization of microorganisms are key steps that must first be addressed for microbial biosensors. Currently, genetically modified microorganisms play an increasingly significant role in improving the capacity of biosensors. Electrochemical and optical types of transducers have been widely employed in microbial biosensors, although bioluminescence and fluorescence methods have been highlighted recently. Additionally, the microbial fuel cell (MFC), which has been mainly applied in biological oxygen demand (BOD) biosensors, is a promising technology. This article reviews recent developments of microbial biosensors with respect to their applications in environmental monitoring and food analysis, including measurement of a variety of common pollutants, products in fermenting processes, antibiotic residues, and toxins in food. Current limitations and prospective future directions, such as performance optimization, developing portable biosensors for on-site monitoring, combination of genetic and DNA approaches, nanotechnology, and phage-based biosensors for foodborne pathogens, are also discussed in this review.