The frequent exposure and accumulation of heavy metals in organisms cause serious health issues affecting a range of organs such as the brain, liver, and reproductive organs in adults, infants, and children. Several parts of the world have high levels of heavy metals affecting millions of people, costing millions of dollars for improving the potability of water and medical treatment of the affected. Hence, water quality assessment is required to monitor the degree of heavy metal contamination in potable water. In nature, organisms respond to various environmental pollutants such as heavy metals, allowing their survival in a diverse environmental niche. With the advent of recombinant DNA technology, it is now possible to manipulate these natural bioreporters into controlled systems which either turn on or off gene expression or activity of enzymes in the presence of specific heavy metals (compound-specific biosensors) otherwise termed as whole-cell biosensors (WCBs). WCBs provide an upper hand compared to other immunosensors, enzyme-based sensors, and DNA-based sensors since microbes can be relatively easily manipulated, scaled up with relative ease, and can detect only the bioavailable heavy metals. In this review, we summarize the current knowledge of the various mechanisms of toxicity elicited by various heavy metals, thence emphasizing the need to develop heavy metal sensing platforms. Following this, the biosensor-based platforms including WCBs for detecting heavy metals developed thus far have been briefly elaborated upon, emphasizing the challenges and solutions associated with WCBs.