Live-cell fluorescence microscopy is broadly applied to study the dynamics of receptor-mediated cell signaling， but the availability of intracellular biosensors is limited. A biosensor based on the tandem SH2 domains from phospholipase C-γ1 (PLCγ1)， tSH2-WT， has been used to measure phosphorylation of the epidermal growth factor receptor (EGFR). Here， we found that tSH2-WT lacked specificity for phosphorylated EGFR， consistent with the known promiscuity of SH2 domains. Further， EGF-stimulated membrane recruitment of tSH2-WT differed qualitatively from the expected kinetics of EGFR phosphorylation. Analysis of a mathematical model suggested， and experiments confirmed， that the high avidity of tSH2-WT resulted in saturation of its target and interference with EGFR endocytosis. To overcome the apparent target specificity and saturation issues， we implemented two protein engineering strategies. In the first approach， we screened a combinatorial library generated by random mutagenesis of the C-terminal SH2 domain (cSH2) of PLCγ1 and isolated a mutant form (mSH2) with enhanced specificity for phosphorylated Tyr (pTyr) of EGFR. A biosensor based on mSH2 closely reported the kinetics of EGFR phosphorylation but retained cross-reactivity similar to tSH2-WT. In the second approach， we isolated a pTyr-binding protein (SPY992) from a combinatorial library generated by mutagenesis of the Sso7d protein scaffold. Compared to tSH2-WT and mSH2， SPY992 exhibited superior performance as a specific， moderate-affinity biosensor. We extended this approach to isolate a biosensor for EGFR pTyr (SPY1148). This approach of integrating theoretical considerations with protein engineering strategies can be generalized to design and evaluate suitable biosensors for various phospho-specific targets.