There is a growing realization that cell-to-cell variations in gene expression have important biological consequences underlying phenotype diversity and cell fate. Although analytical tools for measuring gene expression, such as DNA microarrays, reverse-transcriptase PCR and in situ hybridization have been widely utilized to discover the role of genetic variations in governing cellular behavior, these methods are performed in cell lysates and/or on fixed cells, and therefore lack the ability to provide comprehensive spatial-dynamic information on gene expression. This has invoked the recent development of molecular imaging strategies capable of illuminating the distribution and dynamics of RNA molecules in living cells. In this review, we describe a class of molecular imaging probes known as molecular beacons (MBs), which have increasingly become the probe of choice for imaging RNA in living cells. In addition, we present the major challenges that can limit the ability of MBs to provide accurate measurements of RNA, and discuss efforts that have been made to overcome these challenges. It is envisioned that with continued refinement of the MB design, MBs will eventually become an indispensable tool for analyzing gene expression in biology and medicine.