Microstructured fibers (MOFs) are among the most innovative developments in optical fiber technology in recent years. These fibers contain arrays of tiny air holes that run along their length and define the waveguiding properties. Optical confinement and guidance in MOFs can be obtained either through modified total internal reflection, or photonic bandgap effects; correspondingly, they are classified into index-guiding Holey Fibers (HFs) and Photonic Bandgap Fibers (PBGFs). MOFs offer great flexibility in terms of fiber design and, by virtue of the large refractive index contrast between glass/air and the possibility to make wavelength-scale features, offer a range of unique properties. In this paper we review the current status of air/silica MOF design and fabrication and discuss the attractions of this technology within the field of sensors, including prospects for further development. We focus on two primary areas, which we believe to be of particular significance. Firstly, we discuss the use of fibers offering large evanescent fields, or, alternatively, guidance in an air core, to provide long interaction lengths for detection of trace chemicals in gas or liquid samples; an improved fibre design is presented and prospects for practical implementation in sensor systems are also analysed. Secondly, we discuss the application of photonic bandgap fibre technology for obtaining fibres operating beyond silica's transparency window, and in particular in the 3μm wavelength region.