Polysaccharides are ubiquitous, generally benign in nature, and compatible with many tissues in biomedical situations, making them appealing candidates for new materials such as therapeutic agents and sensors. Fluorescent labeling can create the ability to sensitively monitor distribution and transport of polysaccharide-based materials, which can for example further illuminate drug-delivery mechanisms and therefore improve design of delivery systems. Herein, we review fluorophore selection and ways of appending polysaccharides, utility of the product fluorescent polysaccharides as new smart materials, and their stimulus-responsive nature, with focus on their biomedical applications as environment-sensitive biosensors, imaging, and as molecular rulers. Further, we discuss the advantages and disadvantages of these methods, and future prospects for creation and use of these self-reporting materials.