With diameter close to or below the wavelength of guided light and high index contrast between the fiber core and the surrounding, an optical microfiber shows a variety of interesting waveguiding properties, including widely tailorable optical confinement, evanescent fields and waveguide dispersion. Among various microfiber applications, optical sensing has been attracting increasing research interest due to its possibilities of realizing miniaturized fiber optic sensors with small footprint, high sensitivity, fast response, high flexibility and low optical power consumption. Here we review recent progress in microfiber optical sensors regarding their fabrication, waveguide properties and sensing applications. Typical microfiber-based sensing structures, including biconical tapers, optical gratings, circular cavities, Mach-Zehnder interferometers and functionally coated/doped microfibers, are summarized. Categorized by sensing structures, microfiber optical sensors for refractive index, concentration, temperature, humidity, strain and current measurement in gas or liquid environments are reviewed. Finally, we conclude with an outlook for challenges and opportunities of microfiber optical sensors.