Biosensors have been widely used as cost-effective, rapid, in situ, and real-time analytical tools for monitoring environments. The development of synthetic biology has enabled emergence of genetically engineered whole-cell microbial biosensors. This review updates the design and optimization principles for a diverse array of whole-cell biosensors based on transcription factors (TF) including activators or repressors derived from heavy metal resistance systems, alkanes, and aromatics metabolic pathways of bacteria. By designing genetic circuits, the whole-cell biosensors could be engineered to intelligently sense heavy metals (Hg2+, Zn2+, Pb2+, Au3+, Cd2+, As3+, Ni2+, Cu2+, and UO22+) or organic compounds (alcohols, alkanes, phenols, and benzenes) through one-component or two-component system-based TFs, transduce signals through genetic amplifiers, and response as various outputs such as cell fluorescence and bioelectricity for monitoring heavy metals and organic pollutants in real conditions, synthetic curli and surface metal-binding peptides for in situ bio-sorption of heavy metals. We further review strategies that have been implemented to optimize the selectivity and correlation between ligand concentration and output signal of the TF-based biosensors, so as to meet requirements of practical applications. The optimization strategies include protein engineering to change specificities, promoter engineering to improve sensitivities, and genetic circuit-based amplification to enhance dynamic ranges via designing transcriptional amplifiers, logic gates, and feedback loops. At last, we outlook future trends in developing novel forms of biosensors.