Forster (or fluorescence) resonance energy transfer (FRET) is a process involving the radiation-less transfer of energy from a "donor" fluorophore to an "acceptor" fluorophore. FRET technology enables the quantitative analysis of molecular dynamics in biophysics and in molecular biology, such as the monitoring of protein-protein interactions, protein-DNA interactions, and protein conformational changes. FRET-based biosensors have been utilized to monitor cellular dynamics not only in heterogeneous cellular populations, but also at the single-cell level in real time. Lately, applications of FRET-based biosensors range from basic biological to biomedical disciplines. Despite the diverse applications of FRET, FRET-based sensors still face many challenges. There is an increasing need for higher fluorescence resolution and improved specificity of FRET biosensors. Additionally, as more FRET-based technologies extend to medical diagnostics, the affordability of FRET reagents becomes a significant concern. Here, we will review current advances and limitations of FRET-based biosensor technology and discuss future FRET applications.