The use of magnetic resonance imaging (MRI) and spectroscopy (MRS) in the clinical setting enables the acquisition of valuable anatomical information in a rapid, non-invasive fashion. However, MRI applications for identifying disease-related biomarkers are limited due to low sensitivity at clinical magnetic field strengths. The development of hyperpolarized (hp) ¹²⁹Xe MRI/MRS techniques as complements to traditional ¹H-based imaging has been a burgeoning area of research over the past two decades. Pioneering experiments have shown that hp ¹²⁹Xe can be encapsulated within host molecules to generate ultrasensitive biosensors. In particular, xenon has high affinity for cryptophanes, which are small organic cages that can be functionalized with affinity tags, fluorophores, solubilizing groups, and other moieties to identify biomedically relevant analytes. Cryptophane sensors designed for proteins, metal ions, nucleic acids, pH, and temperature have achieved nanomolar-to-femtomolar limits of detection via a combination of ¹²⁹Xe hyperpolarization and chemical exchange saturation transfer (CEST) techniques. This review aims to summarize the development of cryptophane biosensors for ¹²⁹Xe MRI applications, while highlighting innovative biosensor designs and the consequent enhancements in detection sensitivity, which will be invaluable in expanding the scope of ¹²⁹Xe MRI.