This review addresses the challenges and progress in sensor development and radiometric correction for agricultural applications with particular emphasis on activities within the U.S. Department of Agriculture (USDA) Agricultural Research Service (ARS). Examples of sensor development include on-site development of sensors and platforms, participation in cooperative research and development agreements (CRADA) with commercial companies, and membership on NASA science teams. Examples of progress made in sensor radiometric correction suitable for agriculture are presented for both laboratory and field environments. The direction of future sensor development includes integrated sensors and systems, sensor standardization, and new sensor technologies measuring fluorescence and soil electrical conductivity, and utilizing LIght Detection and Ranging (lidar), hyperspectral, and multiband thermal wavelengths. The upcoming challenges include definition of the core spectral regions for agriculture and the sensor specifications for a dedicated, orbiting agricultural sensor, determination of an operational approach for reflectance and temperature retrieval, and enhanced communication between image providers, research scientists, and users. This review concludes with a number of avenues through which USDA could promote sensor development and radiometric correction for agricultural applications. These include developing a network of large permanent calibration targets at USDA ARS locations; investing in new technologies; pooling resources to support large-scale field experiments; determining ARS-wide standards for sensor development, calibration, and deployment; and funding interagency agreements to achieve common goals.