Real-time imaging of molecular events inside living cells is important for understanding the basis of physiological processes and diseases. Genetically encoded sensors that use fluorescence resonance energy transfer (FRET) between two fluorescent proteins are attractive in this respect because they do not require cell-invasive procedures, can be targeted to different locations in the cell and are easily adapted through mutagenesis and directed evolution approaches. Most FRET sensors developed so far show a relatively small difference in emission ratio upon activation, which severely limits their application in high throughput cell-based screening applications. In our work, we try to develop strategies that allow design of FRET-based sensors with intrinsically large ratiometric changes. This rational design approach requires a better understanding and quantitative description of the conformational changes in these fusion proteins. In this chapter, I first discuss some of the key factors and strategies that determine the ratiometric response of FRET sensors, followed by an overview of our recent work in this area. Important concepts that will be discussed are (1) the conformational behavior of flexible peptide linkers to quantitatively describe the dependence of energy transfer on linker length and (2) the control of intramolecular domain interactions using the concept of effective molecular concentration.