Live-cell microscopy is now routinely used to monitor the activities of the genetically encoded biosensor proteins that are designed to directly measure specific cell signaling events inside cells, tissues, or organisms. Most fluorescent biosensor proteins rely on Forster resonance energy transfer (FRET) to report conformational changes in the protein that occur in response to signaling events, and this is commonly measured with intensity-based ratiometric imaging methods. An alternative method for monitoring the activities of the FRET-based biosensor proteins is fluorescence lifetime imaging microscopy (FLIM). FLIM measurements are made in the time domain, and are not affected by factors that commonly limit intensity measurements. In this review, we describe the use of the digital frequency domain (FD) FLIM method for the analysis of FRET signals. We illustrate the methods necessary for the calibration of the FD FLIM system, and demonstrate the analysis of data obtained from cells expressing "FRET standard" fusion proteins. We then use the FLIM-FRET approach to monitor the changes in activities of two different biosensor proteins in specific regions of single living cells. Importantly, the factors required for the accurate determination and reproducibility of lifetime measurements are described in detail.