The proliferation of physiological sensors opens new opportunities to explore interactions, conduct experiments and evaluate the user experience with continuous monitoring of bodily functions. Commercial devices, however, can be costly or limit access to raw waveform data, while low-cost sensors are efforts-intensive to setup. To address these challenges, we introduce PhysioKit, an open-source, low-cost physiological computing toolkit. PhysioKit consists of (i) a sensor and hardware layer that can be configured in a modular manner per research needs, (ii) a software application layer that enables data acquisition, real-time visualization and machine learning (ML)-enabled signal quality assessment. This also supports basic visual biofeedback configurations and synchronized acquisition for co-located or remote multi-user settings. In a validation study for photo-plethysmography (PPG) sensor with 15 participants, PhysioKit shows strong agreement with research-grade PPG sensors. Furthermore, we report usability survey results from 10 micro-project teams (44 individual members in total) who use PhysioKit for 4-6 weeks, providing insights into its use cases and research benefits. We conclude by discussing extensibility and potential impact of the toolkit on the research community.