Once viewed solely as a tool for low throughput and kinetic analysis of biomolecular interactions, optical biosensors are gaining widespread uses in drug discovery because of recent advances in instrumentation and experimental design. These advances have expanded the capabilities of optical biosensors to meet the needs at many points in the drug discovery process. Concurrent shifts in drug discovery paradigms have seen the growing use of whole cell systems for drug screens, thus creating both a need in drug discovery and a solution in optical biosensors. This article reviews important advances in optical biosensor instrumentation, and highlights the potential of optical biosensors for drug discovery with an emphasis on whole cell sensing in both high throughput and high content fashions.