The development of reliable implantable electrochemical sensors for long-term continuous in vivo monitoring of clinically important analytes remains one of the great challenges of biomedical engineering technology today. Although significant advances in the intravascular and subcutaneous biosensor development have been achieved, the biological response to the implantable biosensors continues to have a limiting impact on the performance and lifetime of such sensors, preventing their long-term use in real-time monitoring of critical analytes. Here, we examine the current status of research and development in this area, emphasizing the effect of the inflammatory and wound healing response on sensor biofouling. Also, the biocompatibility aspects of sensor implantation are discussed, as they are part of the inseparable dynamic continuum of biocompatibility and biofouling initiated by the presence of any foreign material/device in vivo.