Genetically encoded biosensors based on fluorescent proteins (FPs) are powerful tools for tracking analytes and cellular events with high spatial and temporal resolution in living cells and organisms. Compared with intensiometric readout and ratiometric readout, fluorescence lifetime readout provides absolute measurements, independent of the biosensor expression level and instruments. Thus, genetically encoded fluorescence lifetime biosensors play a vital role in facilitating accurate quantitative assessments within intricate biological systems. In this review, we first provide a concise description of the categorization and working mechanism of genetically encoded fluorescence lifetime biosensors. Subsequently, we elaborate on the combination of the fluorescence lifetime imaging technique and lifetime analysis methods with fluorescence lifetime biosensors, followed by their application in monitoring the dynamics of environment parameters, analytes and cellular events. Finally, we discuss worthwhile considerations for the design, optimization and development of fluorescence lifetime-based biosensors from three representative cases.