Molecular beacons are a new class of fluorescent probes that can report the presence of specific nucleic acids with high sensitivity and excellent specificity. In addition to their current wide applications in monitoring the progress of polymerase chain reactions, their unique properties make them promising probes for the detection and visualization of target biomolecules in living cells. This article is focused on our recent research in exploring the potential of using molecular beacon for living-cell studies in three important areas: the monitoring of mRNA in living cells, the development of ultrasmall DNA/RNA biosensors, and the novel approach of combining molecular beacon's signal transduction mechanism with aptamer's specificity for real-time protein detection. These applications demonstrate molecular beacon's unique properties in bioanalysis and bioassay development.