Molecularly imprinted polymers (MIPs), a biomimetic artificial receptor system inspired by the human body’s antibody-antigen reactions, have gained significant attraction in the area of sensor development applications, especially in the areas of medical, pharmaceutical, food quality control, and the environment. MIPs are found to enhance the sensitivity and specificity of typical optical and electrochemical sensors severalfold with their precise binding to the analytes of choice. In this review, different polymerization chemistries, strategies used in the synthesis of MIPs, and various factors influencing the imprinting parameters to achieve high-performing MIPs are explained in depth. This review also highlights the recent developments in the field, such as MIP-based nanocomposites through nanoscale imprinting, MIP-based thin layers through surface imprinting, and other latest advancements in the sensor field. Furthermore, the role of MIPs in enhancing the sensitivity and specificity of sensors, especially optical and electrochemical sensors, is elaborated. In the later part of the review, applications of MIP-based optical and electrochemical sensors for the detection of biomarkers, enzymes, bacteria, viruses, and various emerging micropollutants like pharmaceutical drugs, pesticides, and heavy metal ions are discussed in detail. Finally, MIP’s role in bioimaging applications is elucidated with a critical assessment of the future research directions for MIP-based biomimetic systems.