Carbon nanotubes are exceptionally photostable fluorophores that emit in the near infrared range. Their novel optical properties make them particularly appealing for applications in biosensing. This chapter focuses on the state-of-the-art development of optical biosensors based on single-walled carbon nanotubes (SWCNTs); also, it draws attention to the basic photophysics of SWCNTs, optical-sensing mechanisms, and surface functionalization principles. The concerted efforts from the research community in the past decade have enabled the realization of several SWCNT-based optical biosensors that provide real-time, non-invasive analyte detection. We review the performance of these biosensors with regard to their sensitivity, selectivity and response time, and highlight the prospects and challenges of constructing biosensors for more advanced sensing applications.