Environmental toxic pollutants and pathogens that enter the ecosystem are major global issues. Detection of these toxic chemicals/pollutants and the diagnosis of a disease is a first step in efficiently controlling their contamination and spread, respectively. Various analytical techniques are available to detect and determine toxic chemicals/pathogens, including liquid chromatography, HPLC, mass spectroscopy, and enzyme-linked immunosorbent assays. However, these sensing strategies have some drawbacks such as tedious sample pretreatment and preparation, the requirement for skilled technicians, and dependence on large laboratory-based instruments. Alternatively, biosensors, especially paper-based sensors, could be used extensively and are a cost-effective alternative to conventional laboratory testing. They can improve accessibility to testing to identify chemicals and pollutants, especially in developing countries. Due to its low cost, abundance, easy disposal (by incineration, for example) and biocompatible nature, paper is considered a versatile material for the development of environmentally friendly electrochemical/optical (bio) sensor devices. This review presents an overview of sensing platforms constructed from paper, pointing out the main merits and demerits of paper-based sensing systems, their fabrication techniques, and the different optical/electrochemical detection techniques that they exploit.