Current research to develop biosensors for the detection of pathogens and indicator organisms in source and finished water is motivated by their potential for rapid analysis compared to laborious and time-consuming cultural methods. There is great diversity in the biosensors being developed to detect E. coli O157:H7, both immunosensors that capture and detect whole cells and genosensors that capture and detect target nucleic acids. All biosensor designs must address both sensitivity and pathogen specificity, in order to minimize both false positives and false negatives. Improvements in sensitivity have resulted from the use of new labeling technologies, especially liposomes, which can encapsulate a large number of fluorescent dye molecules, and quantum dots, which emit a much brighter signal that conventional fluorescent dyes. Some biosensors have been designed to detect viable pathogens, including genosensors that detect transcription of a heat shock gene exclusively in viable cells. An inherent limitation of biosensors is the small capture surface in relation to the large volumes of water that must be sampled in order to assess the public health risk. This necessitates effective concentration methods; however, few researchers have specified how samples would be concentrated. Instead, most biosensors have only been tested in the laboratory using small volumes (<1 mL) of buffer seeded with different concentrations of E. coli O157:H7. Field testing in pilot-scale treatment plants with blind seeding is recommended in order to validate biosensors for the water industry.