This chapter details the design and optimization of biosensors based on a design used successfully to study nucleotide loading of small GTPase proteins in living cells. This design can be generalized to study many other protein activities, using a single, genetically encoded chain incorporating the protein to be studied, an "affinity reagent" which binds only to the activated form of the targeted protein, and mutants of the green fluorescent protein (GFP) that undergo fluorescence resonance energy transfer (FRET). Specific topics include procedures and caveats in the design and cloning of single-chain FRET sensors, in vitro and in vivo validation, expression in living cell systems for biological studies, and some general considerations in quantitative fluorescence imaging.